Another giant leap for Nova Leap as they record a 685% EBITDA year on year increase in Q3, 2019
Investors should put this home health care stock on the top of their watch list before it moves even higher. The Company has now achieved nine consecutive quarters of revenue growth, and as a result the stock is up 38% in the last six months, and 58% in the last three months. Even better for investors is that this Canadian gem is still very cheap with a market cap of just C$ 23 million, due to the early stage of the Company. It operates in the booming US and Canadian health care sectors, in the in-demand area of home health care.
Nova Leap stock price surges higher on strong growth
The stock is Nova Leap Health Corp. (TSXV: NLH) and it is based in Nova Scotia, Canada. Nova Leap acquires, manages, and builds home care service companies. Nova Leap is geographically diversified with operations in 5 different U.S. states: Vermont, New Hampshire, Massachusetts, Rhode Island and Oklahoma as well as Nova Scotia, Canada.
Just released last week their Q3, 2019 financial results were a record for the Company, reporting a 685% EBITDA increase over the same quarter in 2018. Q3, 2019 EBITDA of US$324,676 increased 49.2% over Q2 2019 EBITDA of US$217,549. And the giant leaps don’t stop there, the Company achieved over US$4.4 million in Q3, 2019 revenue, the nine consecutive quarter of revenue growth.
Nova Leap President & CEO Chris Dobbin stated: “Third quarter results were the best in our Company’s history. From a financial perspective, our focus remains on cash flow growth in existing operations and the deployment of free cash flow to high return potential opportunities.”
Nova Leap achieves nine consecutive quarters of revenue growth
Nova Leap has acquired Keystone Homecare and Around The Clock Home Care
Nova Leap continues to acquire small home care businesses and has announced their latest acquisition in Massachusetts. Previously announced on September 25, 2019, Nova Leap has now completed the acquisition of the business assets of Keystone Homecare LLC, located in Stow, Massachusetts.
This news is a follow up to the announcement the Company made in early October on the completed acquisition of the business assets of Around The Clock Home Care, located in Chickasha, Oklahoma. It’s noted that these two latest acquisitions in Oklahoma and Massachusetts, were not reflected in the Q3 results. These are just two recent examples of the Company’s rapid expansion.
Nova Leap is steadily moving up the rankings
Nova Leap achieved the #10 ranking in the 2019 TSX Venture 50™ in the Clean Technology & Life Sciences sector. Announced on September 2019, Nova Leap now ranks at number 4 on the 2019 Canadian Business and Maclean’s Start-up 50 ranking of Canada’s Top New Growth Companies.
Nova Leap’s business model
Nova Leap’s model of success is acquiring small home care businesses in Canada and the US. Combined these small businesses are forming the beginning of what the Company believes will be a large international organization. As the business scales up margins are improving, helped by reduced head office costs as a percentage of revenue. For example, head office costs as a percentage of revenue have fallen from 53% in 2017, to 5.6% in Q3 2019. This trend demonstrates the Company’s ability to scale the business with existing personnel and infrastructure.
The criteria they follow is simple, a geographical focus on the US and Canada, a positive EBITDA with a strong reputation/brand, and ideally have a 10 year history with US$1 million plus in revenues.
Demographics are a strong tailwind for Nova Leap
An aging population in most western countries is requiring more and more home care. Each day in the US over 10,000 people are turning 65, and the baby boomer generation is retiring in droves. The non-medical home care market is a massive $5.4 billion dollar opportunity (6.1% of the $89.2 billion U.S. home health care market revenue).
Nova Leap sees massive opportunities ahead in acquiring established home health care facilities in safe countries. Home health care is a very fragmented industry with no major players having a dominant percentage of the market. Nova Leap strategy is to fill that role as the home care industry is one of the fastest growing industries in the U.S.A.
Nine consecutive quarters of revenue growth shows Nova Leap is really “leaping” ahead. Investors should also be reminded that the name ‘Nova’ means ‘a star that suddenly becomes thousands of times brighter’. The future looks very bright for Nova Leap Health Corp.
Matthew Bohlsen is a Senior Editor for InvestorIntel.com. With a Graduate Diploma in Applied Finance and Investment, and a Graduate Diploma in Financial Planning. He ... <Read more about Matthew Bohlsen>