Featured Company /
Skylight Health Group Inc.
For decades, the healthcare industry has thrived with an expensive fee-for-a-service model that, candidly, didn’t do much to incentivize healing patients. With healthcare expense mushrooming from 5% of U.S. gross domestic product in 1960 to nearly 20% currently, the model simply isn’t sustainable or realistic. Against the backdrop of a need for change, the coronavirus pandemic accelerated a transition in healthcare that not only emphasized home care, but also the value-based-care (VBC) model that pays based on patient health outcomes and quality of services rendered.
The VBC model represents a holistic shift in the industry that can hopefully curb spending, diversify financial risk, and, most importantly, re-imagine a more productive, efficient standard of care. Companies are moving appropriately to capitalize on the opportunity. Amazon (NASDAQ: AMZN) (NASDAQ: ONEM)
On September 6, news hit that Amazon lost its bidding war with UnitedHealth (NYSE: UNH) (NYSE: CVS) (NYSE: SGFY)
The prize for CVS is a smooth segue to broaden its healthcare reach outside its thousands of pharmacy locations. Amongst other things, Signify gathers a litany of data on Medicare Advantage patients, providing insight into needs and health condition. 45 percent of Medicare beneficiaries, or 28 million people, are enrolled in Medicare Advantage. Altogether, Signify serves a network of clients from 50+ health plans and expects to conduct about 2.5 million patients visits (virtual and in-person) during 2022.
Skylight Health Group Inc. (TSX-Venture: SLHG) (OTCQX:SLHGF)
Investor Highlights for Skylight Health Group Inc. (TSX-Venture: SLHG) (OTCQX:SLHGF):
- Company Well Diversified. Skylight has its roots in clinical research, including being awarded 11 clinical studies to date and completing four. In these ongoing initiatives, Skylight last year launched a research unit that has seen revenue so far double in 2022 from $300,000 in 2021.
- M&A Growth Strategy In Overdrive. The company has made 9 U.S. acquisitions in the last 18 months with an annualized revenue run rate of $70 million.
- Last Acquisition Biggest Yet. In May, Skylight made its biggest buyout to date with the acquisition of NeighborMD. The merger added 9 practices in Florida serving over 5,000 patients and expanded Skylight’s footprints across Florida, Pennsylvania, and Colorado to 32 medical centers and treating more than 100,000 patients.
- Seasoned Management Team. Skylight Chairman Patrick McNamee knows a thing or two about expansion, having served as Chief Operating Officer at Express Scripts during a period of growth from $3 billion to $120 billion.
- Revenue Snapshot Shows Impressive Growth. Per the SLHG corporate presentation, the company is generating about $450,000 in revenue and $45,000 in EBITDA (earnings before interest, taxes, depreciation, and amortization) from about 1,200 Medicare Advantage patients. Transitioning from the traditional Medicare fee-for-service model to VBC model, with no additions or changes, will provide a boon to the group’s economics to generate $12.96 million in revenue and $1.296 million in EBITDA. As the number of patients increases – remember there are 28 million people enrolled in Medicare Advantage – so will Skylight revenue and earnings.
- Strong Future Revenue Projections. Projections for 2022 are modeled assuming 4,000 Medicare Reach patients and 1,200 Medicare Advantage patients onboarded this year growing to 17,000 and 13,000, respectively, in 2026. Based upon that conservative expansion, the company is forecasting $200 million in revenue and $30 million in EBITDA in 2026.
- Fundamental Metrics Show Massive Upside. Using Skylight’s estimate for 2022 revenue of $70 million, its prediction to reach EBITDA breakeven this year, and the above enterprise values, Skylight will be trading at 0.5x 2022 EV/Revenue compared to its peers trading at 3-5x 2022 EV/Revenue, giving it what appears to be considerable upside just to reach parity.
“Diversified” is appropriate because Skylight has its roots in clinical research, including being awarded 11 clinical studies to date and completing four. In these ongoing initiatives, Skylight last year launched a research unit that has seen revenue so far double in 2022 from $300,000 in 2021. Originally formed in 2014 as CB2 Insights as a specialist in data collection and patient management in the emerging medical cannabis industry, the company began building a clinic portfolio in 2017 and made the prescient decision to move away from the crowded space into a multi-specialty healthcare company under the Skylight moniker.
The research unit has forged partnerships with Elligo Health Research®, which recently bought skylight collaborator ClinEdge, and Endominance, a firm working with Skylight on patient recruitment for Skylight’s anxiety trial.
“Diversified” is further appropriate insomuch that insurance-related revenue will be comprised of fee-for-service, traditional Medicare (ACO Reach), and Medicare Advantage Full-Risk (more on that in a moment).
The focus remains on primary care physicians (PCPs) that serve as the gatekeeper for overall healthcare spending. PCPs are the first step in any healthcare treatment plan and represent a $300 billion market that directly influences $2+ trillion in downstream healthcare spend. About 40 percent of U.S. PCP offices are operated independently, where they face constantly rising operational costs, stiff competition, and shrinking reimbursement rates, while lacking the resources to tap into the spend heading downstream under the traditional fee-for-service model. By joining the Skylight network, these small offices can realize countless state and national benefits only available through scale.
Skylight increases efficiency by providing access to capital, technology, improved contracting, and expertise in transitioning from fee-for-service to a VBC model. The tenets of a VBC model are a win-win for patient and PCP as it minimizes downstream hassle and costs by improving patient care upfront, navigating patient risk, and avoiding unnecessary treatments and costs with preventative care.
Skylight is moving with a purpose to establish itself as a leader in the space alongside the likes of One Medical, Oak Street Health (NYSE:OSH) (NYSE: CANO)
The most recent acquisition was in May, when Skylight made its biggest buyout to date with the acquisition of NeighborMD. The merger added 9 practices in Florida serving over 5,000 patients and expanded Skylight’s footprints across Florida, Pennsylvania, and Colorado to 32 medical centers and treating more than 100,000 patients.
To the point of Medicare Advantage, Skylight in April launched a joint venture with Collaborative Health Systems (CHS), a population health management services organization and subsidiary of Top 5 U.S. insurance payor Centene Corp. (NYSE: CNC)
The JV is also setting up a foundation to acquire PCP practices looking for an exit. Skylight Chairman Patrick McNamee knows a thing or two about expansion, having served as Chief Operating Officer at Express Scripts during a period of growth from $3 billion to $120 billion. As it goes, the SLHG team is steeped with healthcare and capital markets experience.
While future buyouts could always be a possibility when the deal is right, the foundation is set and the rubber is meeting the road for Skylight to switch from inorganic to organic growth at a more favorable cost per patient acquisition. This is an important value milestone for SLHG.
While it has more than 100,000 patients in aggregate across its clinics, the company says it now has about 2,500 lives already in “full-risk” within the VBC model, a number it wasn’t expecting until 2025.
Full-risk VBC, sometimes called full-risk capitation, is a small part of the insurance industry today that is touted by some as the future of healthcare. With full-risk VBC, Medicare and private insurance companies partner with PCPs, transferring the full financial risk for the patient’s care to the PCP. The provider pays for the requisite care while having an opportunity to keep the savings if the patient remains healthy. This is not trivial amounts of cashflow, it can be quite lucrative to the PCP if the patient avoids preventable – and expensive – medical interventions.
For Skylight, the economics are compelling also. Per the SLHG corporate presentation, the company is generating about $450,000 in revenue and $45,000 in EBITDA (earnings before interest, taxes, depreciation, and amortization) from about 1,200 Medicare Advantage patients. Transitioning from the traditional Medicare fee-for-service model to VBC model, with no additions or changes, will provide a boon to the group’s economics to generate $12.96 million in revenue and $1.296 million in EBITDA. As the number of patients increases – remember there are 28 million people enrolled in Medicare Advantage – so will Skylight revenue and earnings.
Medicare is an integral growth driver for Skylight. Projections for 2022 are modeled assuming 4,000 Medicare Reach patients and 1,200 Medicare Advantage patients onboarded this year growing to 17,000 and 13,000, respectively, in 2026. Based upon that conservative expansion, the company is forecasting $200 million in revenue and $30 million in EBITDA in 2026.
While projections and estimates help define the future potential, Wall Street likes to use certain metrics when determining current value. The chart below provides some color on how Skylight stacks up to Oak Street and CanoHealth.
Using Skylight’s estimate for 2022 revenue of $70 million, its prediction to reach EBITDA breakeven this year, and the above enterprise values, Skylight will be trading at 0.5x 2022 EV/Revenue compared to its peers trading at 3-5x 2022 EV/Revenue, giving it what appears to be considerable upside just to reach parity for a company trading at 67 Canadian cents per share and a market cap of just over CDN$26 million (US$19.8 million).
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As a result of its commitment to journalistic excellence and abundance of information in a particular area of equity investing (micro-cap investing) where there aren’t many credible sources of information, AllPennyStocks.com continues to have one of the largest audiences of micro-cap investors on the internet.
Corporate Snapshot:
Skylight Health Group Inc.
Stock Symbol:
CA
Stock Exchange:
TSX-Venture
Sector:
Healthcare
52 Week High:
$4.3300
52 Week Low:
$0.5000
Current Stock Quote / Chart / News: Click here
Information as of
September 15, 2022
For decades, the healthcare industry has thrived with an expensive fee-for-a-service model that, candidly, didn’t do much to incentivize healing patients. With healthcare expense mushrooming from 5% of U.S. gross domestic product in 1960 to nearly 20% currently, the model simply isn’t sustainable or realistic. Against the backdrop of a need for change, the coronavirus pandemic accelerated a transition in healthcare that not only emphasized home care, but also the value-based-care (VBC) model that pays based on patient health outcomes and quality of services rendered.
The VBC model represents a holistic shift in the industry that can hopefully curb spending, diversify financial risk, and, most importantly, re-imagine a more productive, efficient standard of care. Companies are moving appropriately to capitalize on the opportunity. Amazon (NASDAQ: AMZN) (NASDAQ: ONEM)
On September 6, news hit that Amazon lost its bidding war with UnitedHealth (NYSE: UNH) (NYSE: CVS) (NYSE: SGFY)
The prize for CVS is a smooth segue to broaden its healthcare reach outside its thousands of pharmacy locations. Amongst other things, Signify gathers a litany of data on Medicare Advantage patients, providing insight into needs and health condition. 45 percent of Medicare beneficiaries, or 28 million people, are enrolled in Medicare Advantage. Altogether, Signify serves a network of clients from 50+ health plans and expects to conduct about 2.5 million patients visits (virtual and in-person) during 2022.
Skylight Health Group Inc. (TSX-Venture: SLHG) (OTCQX:SLHGF)
Investor Highlights for Skylight Health Group Inc. (TSX-Venture: SLHG) (OTCQX:SLHGF):
- Company Well Diversified. Skylight has its roots in clinical research, including being awarded 11 clinical studies to date and completing four. In these ongoing initiatives, Skylight last year launched a research unit that has seen revenue so far double in 2022 from $300,000 in 2021.
- M&A Growth Strategy In Overdrive. The company has made 9 U.S. acquisitions in the last 18 months with an annualized revenue run rate of $70 million.
- Last Acquisition Biggest Yet. In May, Skylight made its biggest buyout to date with the acquisition of NeighborMD. The merger added 9 practices in Florida serving over 5,000 patients and expanded Skylight’s footprints across Florida, Pennsylvania, and Colorado to 32 medical centers and treating more than 100,000 patients.
- Seasoned Management Team. Skylight Chairman Patrick McNamee knows a thing or two about expansion, having served as Chief Operating Officer at Express Scripts during a period of growth from $3 billion to $120 billion.
- Revenue Snapshot Shows Impressive Growth. Per the SLHG corporate presentation, the company is generating about $450,000 in revenue and $45,000 in EBITDA (earnings before interest, taxes, depreciation, and amortization) from about 1,200 Medicare Advantage patients. Transitioning from the traditional Medicare fee-for-service model to VBC model, with no additions or changes, will provide a boon to the group’s economics to generate $12.96 million in revenue and $1.296 million in EBITDA. As the number of patients increases – remember there are 28 million people enrolled in Medicare Advantage – so will Skylight revenue and earnings.
- Strong Future Revenue Projections. Projections for 2022 are modeled assuming 4,000 Medicare Reach patients and 1,200 Medicare Advantage patients onboarded this year growing to 17,000 and 13,000, respectively, in 2026. Based upon that conservative expansion, the company is forecasting $200 million in revenue and $30 million in EBITDA in 2026.
- Fundamental Metrics Show Massive Upside. Using Skylight’s estimate for 2022 revenue of $70 million, its prediction to reach EBITDA breakeven this year, and the above enterprise values, Skylight will be trading at 0.5x 2022 EV/Revenue compared to its peers trading at 3-5x 2022 EV/Revenue, giving it what appears to be considerable upside just to reach parity.
“Diversified” is appropriate because Skylight has its roots in clinical research, including being awarded 11 clinical studies to date and completing four. In these ongoing initiatives, Skylight last year launched a research unit that has seen revenue so far double in 2022 from $300,000 in 2021. Originally formed in 2014 as CB2 Insights as a specialist in data collection and patient management in the emerging medical cannabis industry, the company began building a clinic portfolio in 2017 and made the prescient decision to move away from the crowded space into a multi-specialty healthcare company under the Skylight moniker.
The research unit has forged partnerships with Elligo Health Research®, which recently bought skylight collaborator ClinEdge, and Endominance, a firm working with Skylight on patient recruitment for Skylight’s anxiety trial.
“Diversified” is further appropriate insomuch that insurance-related revenue will be comprised of fee-for-service, traditional Medicare (ACO Reach), and Medicare Advantage Full-Risk (more on that in a moment).
The focus remains on primary care physicians (PCPs) that serve as the gatekeeper for overall healthcare spending. PCPs are the first step in any healthcare treatment plan and represent a $300 billion market that directly influences $2+ trillion in downstream healthcare spend. About 40 percent of U.S. PCP offices are operated independently, where they face constantly rising operational costs, stiff competition, and shrinking reimbursement rates, while lacking the resources to tap into the spend heading downstream under the traditional fee-for-service model. By joining the Skylight network, these small offices can realize countless state and national benefits only available through scale.
Skylight increases efficiency by providing access to capital, technology, improved contracting, and expertise in transitioning from fee-for-service to a VBC model. The tenets of a VBC model are a win-win for patient and PCP as it minimizes downstream hassle and costs by improving patient care upfront, navigating patient risk, and avoiding unnecessary treatments and costs with preventative care.
Skylight is moving with a purpose to establish itself as a leader in the space alongside the likes of One Medical, Oak Street Health (NYSE:OSH) (NYSE: CANO)
The most recent acquisition was in May, when Skylight made its biggest buyout to date with the acquisition of NeighborMD. The merger added 9 practices in Florida serving over 5,000 patients and expanded Skylight’s footprints across Florida, Pennsylvania, and Colorado to 32 medical centers and treating more than 100,000 patients.
To the point of Medicare Advantage, Skylight in April launched a joint venture with Collaborative Health Systems (CHS), a population health management services organization and subsidiary of Top 5 U.S. insurance payor Centene Corp. (NYSE: CNC)
The JV is also setting up a foundation to acquire PCP practices looking for an exit. Skylight Chairman Patrick McNamee knows a thing or two about expansion, having served as Chief Operating Officer at Express Scripts during a period of growth from $3 billion to $120 billion. As it goes, the SLHG team is steeped with healthcare and capital markets experience.
While future buyouts could always be a possibility when the deal is right, the foundation is set and the rubber is meeting the road for Skylight to switch from inorganic to organic growth at a more favorable cost per patient acquisition. This is an important value milestone for SLHG.
While it has more than 100,000 patients in aggregate across its clinics, the company says it now has about 2,500 lives already in “full-risk” within the VBC model, a number it wasn’t expecting until 2025.
Full-risk VBC, sometimes called full-risk capitation, is a small part of the insurance industry today that is touted by some as the future of healthcare. With full-risk VBC, Medicare and private insurance companies partner with PCPs, transferring the full financial risk for the patient’s care to the PCP. The provider pays for the requisite care while having an opportunity to keep the savings if the patient remains healthy. This is not trivial amounts of cashflow, it can be quite lucrative to the PCP if the patient avoids preventable – and expensive – medical interventions.
For Skylight, the economics are compelling also. Per the SLHG corporate presentation, the company is generating about $450,000 in revenue and $45,000 in EBITDA (earnings before interest, taxes, depreciation, and amortization) from about 1,200 Medicare Advantage patients. Transitioning from the traditional Medicare fee-for-service model to VBC model, with no additions or changes, will provide a boon to the group’s economics to generate $12.96 million in revenue and $1.296 million in EBITDA. As the number of patients increases – remember there are 28 million people enrolled in Medicare Advantage – so will Skylight revenue and earnings.
Medicare is an integral growth driver for Skylight. Projections for 2022 are modeled assuming 4,000 Medicare Reach patients and 1,200 Medicare Advantage patients onboarded this year growing to 17,000 and 13,000, respectively, in 2026. Based upon that conservative expansion, the company is forecasting $200 million in revenue and $30 million in EBITDA in 2026.
While projections and estimates help define the future potential, Wall Street likes to use certain metrics when determining current value. The chart below provides some color on how Skylight stacks up to Oak Street and CanoHealth.
Using Skylight’s estimate for 2022 revenue of $70 million, its prediction to reach EBITDA breakeven this year, and the above enterprise values, Skylight will be trading at 0.5x 2022 EV/Revenue compared to its peers trading at 3-5x 2022 EV/Revenue, giving it what appears to be considerable upside just to reach parity for a company trading at 67 Canadian cents per share and a market cap of just over CDN$26 million (US$19.8 million).
About AllPennyStocks.com:
AllPennyStocks.com Media, Inc., founded in 1999, is one of North America’s largest and most comprehensive small-cap / penny stock financial portals. With Canadian and U.S. focused penny stock features and content, the site offers information for novice investors to expert traders. Outside of the countless free content available to visitors, AllPennyStocks.com Pro (premium service) caters to traders looking for that trading edge by offering monthly stock picks, daily penny stock to watch trade ideas, market commentary and more.
As a result of its commitment to journalistic excellence and abundance of information in a particular area of equity investing (micro-cap investing) where there aren’t many credible sources of information, AllPennyStocks.com continues to have one of the largest audiences of micro-cap investors on the internet.
Forward Looking Statements
This report includes forward-looking statements that reflect current expectations about its future results, performance, prospects and opportunities. Skylight Health Group Inc. has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause Skylight Health Group Inc.'s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company's growth expectations and ongoing funding requirements, and specifically, the Company's growth prospects with scalable customers, and those outlined above. Other risks include the Company's limited operating history, the Company's history of operating losses, consumers' acceptance, the Company's use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company's securities, the possible volatility of the Company's stock price, the concentration of ownership, and the potential fluctuation in the Company's operating results.
Disclaimer
AllPennyStocks.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. Information contained in this report was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. For more information see our disclaimer section, a link of which can be found on our web site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates. This is an advertisement for Skylight Health Group Inc. The purpose of this advertisement, like any advertising, is to provide coverage and awareness for the company. The information provided in this advertisement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country.
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