Apollo Medical Holdings

December 4, 2015

Market Data

Fiscal Year March
Industry Healthcare
Market Cap $29.8M
Price/Earnings (ttm) N/A
Price/Book* (mrq) 7.8x
EV/Sales (ttm) 0.6x
Insider Ownership 45.1%
Shares Outstanding 5.5M
Equity Float 1.9M
Avg. Volume (3 mo.) 425
As of December 4, 2015

Income Statement Snapshot

Revenue (TTM) $38.8M
Operating Loss ($3.4M)

Balance Sheet Snapshot

Cash* (ProForma) $6.5M
Debt* (ProForma) $1.2M

*Adjusted for $10 million strategic equity investment with NMM, and the retirement of $7.3 million in NNA debt

Apollo Medical Holdings (“ApolloMed” or “AMEH”) is a leading population management and physician healthcare delivery company. Apollo provides medical management and care coordination for over 1,000 providers and 40,000 patients; including many senior patients. In addition, Apollo doctors provide care for over 100,000 patients in hospitals, facilities, and clinics. ApolloMed’s integrated healthcare delivery platform is comprised of ApolloMed Hospitalists, ApolloMed ACO (Accountable Care Organization), Maverick Medical Group IPA (Independent Physician Association), Apollo Palliative Services, and ApolloMed Care Clinics. ApolloMed is able to provide high quality, cost-effective care, and its revenue model ranges from traditional volume-based payments to taking full clinical and financial risk for pools of patients.

Increases in healthcare costs and the passing of the ACA have driven the need for companies that can both improve the quality of healthcare given and contain healthcare costs. Integrated healthcare services can deliver a coordinated approach that provides the best outcomes for patients and physicians, along with maximizing the value of each of the Company’s physician groups. M&A activity by several large healthcare companies (Fresenius’s majority acquisition of Sound Physicians and Cogent, Rite Aid’s purchase of Urgent Care Centers, Humana’s acquisition of Metropolitan Health Network, and DaVita’s acquisition of HealthCare Partners), underscores the healthcare industry’s move toward an integrated care model. We are valuing AMEH at a target price of $29.00. Based on our projections, this values AMEH at a EV/S (FY17E) of 1.2x and a EV/EBITDA (FY17E) of 11.5x. We believe that value-based healthcare models offer high potential revenue growth going forward and that AMEH will deliver strong EBITDA and net income as its business begins to mature and reach scale.

  • FY15 revenue increased 196% YoY to $33.0 million; 1HFY16 revenue increased 37% YoY to $21.6 million
    • Additional scale will improve margins and help with patient risk and infrastructure costs
    • At scale, we are projecting AMEH to operate at approximately 12%-15% EBITDA margins. We project the Company will be able to reach this at about $150 million in revenue

  • U.S. Healthcare market was $2.8 trillion in 2012 and is projected to grow to $5.0 trillion by 2022 (6.0% CAGR)
    • Medicare and Medicaid spending was over $1.0 trillion in 2013

  • ApolloMed ACO achieved $10.98 million in total savings in its first year and $3.9 million in total savings in its second year
    • Received a $5.38 million revenue distribution in year one from the Centers for Medicare & Medicaid Services as a result of the savings; second highest revenue distribution received in the state of California, and the 25th highest distribution in the United States
    • Potential to receive this distribution every year

  • AMEH expertise in high-risk and elderly patients population groups accounts for the majority of healthcare costs and allows for potential financial differentiation

Client Page

Investor Contact Info:
RedChip Companies, Inc.
1017 Maitland Center Commons Blvd.
Maitland, FL 32751
(407) 644-4256



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