CRH Medical’s new leadership should take it to the next level, Beacon says

After the fifth consecutive quarter that exceeded expectations, Beacon Securities analyst Doug Cooper says the real story on CRH Medical Corp (CRH Medical Corp. Stock Quote, Chart TSX:CRH NYSE:CRHM)) could be the company’s new CEO.

On Wednesday, CRH reported its Q1, 2019 results. The company posted operating income of $3.8-million on revenue of $29.1-million, a topline that was up

“We are very pleased with our 2019 Q1 results. Steady double digit revenue growth coupled with shareholder adjusted operating EBITDA of $8.8 million for the quarter show that our model continues to deliver on its potential and validate our acquisition and operational strategies,” CEO Dr. Tushar Ramani said. “CRH is well positioned to grow its current model, expand its offerings, and continue to deliver strong financial results.”

Cooper says while the quarter was impressive, another important press release came on April 9,. when the company appointed Ramani to succeed Edward Wright as CEO.

“Aside from the 5th consecutive quarter that exceeded expectations, the biggest news in the quarter was its early April announcement that Dr. Tushar Ramani had replaced Mr. Edward Wright as CEO. We do not view this announcement as a critique of Mr. Wright, who spearheaded the business into the anesthesia segment, but rather that CRH is ready to move to the next level. In fact, we believe the company has been so successful that it has garnered the attention of someone of the caliber of Dr. Ramini.”

In a research update to clients today, Cooper maintained his “Buy” rating and one-year price target of (U.S.) $6.00 on CRH Medical, implying a return of 101 per cent at the time of publication.

Cooper thinks the company will post EBITDA of $40.8-million on revenue of $129.8-million in fiscal 2019. He expects those numbers will improve to EBITDA of $41.5-million on a topline of $132.4-million the following year.

“With his background and industry relationships, we believe Dr. Ramani is uniquely qualified to take CRH to the next level,” the analyst adds.