Stock Watch List: WellCare Health Plans, Inc. (NYSE: WCG)

On 04 March 2019, WellCare Health Plans, Inc. (NYSE: WCG) ended the last transaction at $244.25, with a change of -6.08% or -15.80points. The daily volume was calculated at volume shares 902,031. The company has a market worth of $12.211B. It holds an average volume of 755,600 shares. In recent session, the stock hit the peak level of $263.05 and touched to lowest level of $242.83.

WellCare Health Plans, Inc. (WCG) recently stated results for the quarter ended December 31, 2018. As determined under generally accepted accounting principles (GAAP), net income for the fourth quarter of 2018 was $55.9M, or $1.11 per diluted share. Adjusted net income for the fourth quarter of 2018 was $82.4M, or $1.63 per diluted share.  GAAP net income for the full-year 2018 was $439.8M, or $9.29 per diluted share.  Adjusted net income for 2018 was $522.3M, or $11.03 per diluted share.

“While our recent focus has been on 2019 and beyond, we are happy to report a strong finish to 2018, a year with multiple Medicaid RFP wins and the closing of two meaningful acquisitions,” stated Ken Burdick, WellCare’s chief executive officer.  “We are excited that we were able to capitalize on opportunities that will provide continued revenue and earnings growth over the next few years.”

Key Highlights

  • GAAP and adjusted total revenue of $20.4B and $20.0B for the full-year 2018 raised 20.0 percent and 18.3 percent, respectively, contrast with the full-year 2017.
  • GAAP and adjusted earnings per diluted share of $9.29 and $11.03 for the full-year 2018 raised 11.8 percent and 29.5 percent, respectively, contrast with the full-year 2017.
  • Adjusted net income margin for the full-year 2018 was 2.6 percent, a 30 basis point improvement contrast with the full-year 2017.
  • GAAP and adjusted Medicaid Health Plans premium revenue of $13.0B and $12.6B for the full-year 2018 raised 21.1 percent and 18.5 percent respectively, contrast with the full-year 2017.
  • Medicare Health Plans premium revenue of $6.3B for the full-year 2018 raised 18.7 percent contrast with the full-year 2017.
  • Medicare Prescription Drug Plans MBR of 72.4 percent for the full-year 2018 improved 10 percentage points contrast with the full-year 2017.
  • GAAP and adjusted SG&A ratios of 8.3 percent for the full-year 2018 improved 40 basis points and 20 basis points, respectively, contrast with the full-year 2017.
  • On October 1, 2018, WellCare began the implementation of its new and expanded managed Medicaid contract in the state of Arizona.
  • On November 30, 2018, WellCare closed the acquisition of Aetna, Inc.’s entire standalone Medicare Part D prescription drug business (“Aetna Part D business”). Per the terms of the contracts, Aetna will provide administrative services to, and retain the financial risk of, the Aetna Part D business through 2019.
  • On December 1, 2018, WellCare began the implementation of its new and expanded managed Medicaid contracts in the state of Florida.
  • On February 1, 2019, WellCare began the state-wide implementation of the Children’s Medical Services contract in Florida.
  • On February 4, 2019, WellCare received notice from the North Carolina Department of Health and Human Services that it was awarded a contract to provide managed Medicaid services statewide, which is subject to a protest process.
  • As of December 31, 2018, unregulated cash, cash equivalents and investments were about $516.0M.

2019 Financial Outlook

WellCare is increasing its full-year 2019 adjusted EPS guidance to a range of $13.25 to $13.50 from its previous guidance range of $13.15 to $13.40 per diluted share.  Refer to the appendix in this news release for specific 2019 guidance metrics, related footnotes and basis of presentation.

The GAAP SG&A expense ratio was 8.8 percent in the fourth quarter of 2018 contrast with 10.2 percent in the fourth quarter of 2017. The adjusted SG&A expense ratio was 8.9 percent in the fourth quarter of 2018 contrast with 10.2 percent in the fourth quarter of 2017.  The year-over-year decrease in the company’s GAAP and adjusted SG&A ratios were the result of the company’s acquisition of Meridian and continued operational leverage. In addition, the reinstatement of the ACA HIF in 2018 and associated Medicaid ACA HIF reimbursement also contributed to the year-over-year decrease in the GAAP Medicaid MBR.

Medicaid Health Plans Section Results

Medicaid Health Plans membership was 3.9M as of December 31, 2018 and raised by about 1.2M members, or 44.4 percent, contrast with December 31, 2017. The raise was primarily Because of the company’s acquisition of Meridian.

GAAP and adjusted Medicaid Health Plans revenue was $4.1B and $4.0B, respectively, for the fourth quarter of 2018, an raise of 53.4 percent and 50.0 percent, respectively, contrast with the fourth quarter of 2017. The raises in GAAP and adjusted premium revenue were primarily the result of the company’s acquisition of Meridian, the addition of new members as a result of business expansion in Illinois and Arizona, partially offset by lower membership in certain of our markets. In addition, the reinstatement of the ACA HIF in 2018 and associated Medicaid ACA HIF reimbursement also contributed to the year-over-year raise in GAAP Medicaid premium revenue.

The short ratio in the company’s stock is documented at 1.94 and the short float is around of 2.95%. The average true range of the stock is observed at 7.98 and the relative strength index of the stock is recorded at 33.76.

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