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Cross Country Healthcare Q3 Earnings: Can NasdaqGS:CCRN Hit Its -$0.03 EPS Target?

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Cross Country Healthcare, Inc. (NasdaqGS:CCRN) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of -$0.03/share on revenue of $179.1 million. The consensus earnings per share (EPS) of -$0.03/share is based on a poll of 7 analysts and represents a decline in eps of −162.9% over the same quarter last year, when the company reported earnings of $0.05/share.

The revenue forecast of $179.1 million based on a poll of 8 analysts implies a year-over-year (YoY) decline in revenue of −14.4%. Last year the company reported $209.2 million in revenue for the quarter.

Expected to report EPS of -$0.03/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $179.12 $209.20 −14.4%
EPS -$0.03 $0.05 −162.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 1 quarter.

What are your expectations from Cross Country Healthcare, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.03 $0.16 −589.1% Beat
Q1, 2020 -$0.01 -$0.01 0% Met
Q4, 2019 $0.06 $0.07 20.7% Beat
Q3, 2019 $0.01 $0.05 301.3% Beat
Q2, 2019 -$0 $0.01 −339.8% Beat
Q1, 2019 -$0.04 $0.02 −152.5% Beat
Q4, 2018 $0.02 $0 -100% Missed
Q3, 2018 $0.03 $0.02 −40.5% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 9.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $6.45 $7.07 9.6% Increase
May 7, 2020 $6.04 $5.75 −4.8% Decline
March 4, 2020 $9.29 $9.33 0.4% Increase
November 5, 2019 $10.83 $12.37 14.2% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.89, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.89 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Cross Country Healthcare, Inc. is currently trading at $6.88/share, down −2.1% for the day. The company is trading at approximately 51.6% of its 52-week high of $13.42/share. The company’s stock price is down −2.8% since the last earnings report and down −8.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 51.75 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:CCRN Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −12.59 and a forward P/E multiple of 51.41.

Cross Country Healthcare, Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.74. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $6.88
P/E Ratio −12.6x
P/E Ratio (Fwd) 51.4x
PEG Ratio −0.2
Total Debt / Total Capital 22.3%
Levered Free Cash Flow $10.265 million
EV / EBITDA 13.8x

Finbox

Cross Country Healthcare, Inc. is a micro-cap stock with a market capitalization of $263.7 million and a total enterprise value of $333.5 million. The company operates in the Healthcare sector and the Healthcare Providers & Services industry.

Cross Country Healthcare, Inc. provides talent management and other consultative services for healthcare clients in the United States. The company operates in three segments: Nurse and Allied Staffing, Physician Staffing, and Search. The Nurse and Allied Staffing segment offers traditional staffing, including temporary and permanent placement of travel nurses and allied professionals, branch-based local nurses, and allied staffing; short-term staffing of registered nurses, licensed practical nurses, certified nurse assistants, practitioners, pharmacists, and other allied professionals on per diem and short-term assignments; and travel allied professionals on long-term contract assignments, as well as workforce solutions, including MSP, OWS, RPO, IRP, EMR, and consulting services. It serves public and private acute care and non-acute care hospitals, government facilities, public and charter schools, outpatient clinics, ambulatory care facilities, physician practice groups, retailers, and other healthcare providers under the Cross Country brand. The Physician Staffing segment provides physicians in various specialties, certified registered nurse anesthetists, nurse practitioners, and physician assistants under the Cross Country Locums brand as independent contractors on temporary assignments at various healthcare facilities, such as acute and non-acute care facilities, medical group practices, government facilities, and managed care organizations. The Search segment offers retained and contingent search services for physicians, healthcare executives, and other healthcare professionals, as well as recruitment process outsourcing. The company was founded in 1986 and is headquartered in Boca Raton, Florida.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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