RAD - Embedded Expectations Analysis - 2020 03 10
ï€ Rite Aid Corporation (RAD:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 25.6x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about their profitability, investments, and client retentionï€ Specifically, management is also confident EBITDA gross profit was 11bps worse than last year, as a percent of revenues, and they may lack confidence in their ability to meet net income guidance and sustain growth in membership and Thrifty Ice Cream sales. Furthermore, they may be concerned about RX file volume volatility, their Rite Care investments, and their client retention rate. Finally, management may lack confidence in their ability to revamp their clinical services marketing approach, adopt a lean mindset and methodology throughout the firm, and mitigate reimbursement headwinds
Rite Aid is a pharmacy retail healthcare company. The company's Retail Pharmacy segment sells brand and generic prescription drugs, as well as an assortment of front-end products including health and beauty aids, personal care products, seasonal merchandise, and a private brand product line. The company's Pharmacy Services segment provides pharmacy benefit management (PBM) options through its EnvisionRxOptions and MedTrak PBMs, respectively. EnvisionRxOptions also provides mail-order and specialty pharmacy services through EnvisionPharmacies; a claims adjudication software platform in Laker Software; and a national Medicare Part D prescription drug plan through its EnvisionRx Plus product offering.
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