Healthcare
Tom Tobin thinks there are several secular trends, including AI tailwinds, which makes RDNT a compelling idea even after its share price has rebounded in recent months. Core to Tom’s thesis is his ability to track Diagnostic Radiology staffing at RDNT, monitor turnover, and forecast volume and revenue per clinician. While the current valuation against consensus estimates appears stretched, he can model upside well into 2027 with a number of simultaneous secular tailwinds that justify the premium: 1) continued inpatient-to-outpatient imaging migration; 2) mix shift towards high-margin advanced imaging where demand is being driven by Alzheimer's, Oncology and Cardiology; and 3) AI tailwinds driving incremental revenue and operating leverage.
Edition: 225
- 28 November, 2025
Healthcare
Declining reimbursement rates coupled with rising expenses looks set to weigh on margins - earnings shortfalls should cause investors to rethink RDNT’s AI-inflated multiples. Medical imaging, notably core MRI reimbursement rates, are declining at CAGRs of 5-6%. All major operating expenses are rising, competition is increasing and capex requirements are high and ongoing. RDNT is also highly levered (5.5x trailing EBITDA). The stock is up >90% YTD and trades at nearly all-time high EV/Sales, EV/EBITDA and earnings multiples. Historically, it traded at a 40-50% EBITDA multiple discount to competitors, now it trades on par with them.
Edition: 176
- 22 December, 2023