On April 10th, we wrote an article about the changing healthcare landscape and how DocGo Inc. (DCGO) is positioned well to facilitate the transition to more healthcare being delivered outside of traditional healthcare settings. In this article, we would like to provide an update on our thinking and DocGo’s short and long-term business prospects.
DocGo Inc. (DCGO) is a mobile healthcare service provider. They have two primary offerings, medical transportation, and mobile healthcare.
Last month, we attended DocGo’s investor day in New York City. New York City’s Mayor Adams was in attendance, and he praised DocGo’s work as an effective modern-day response to health care crises like Covid-19. He also spoke about the city’s relationship with DocGo in transitioning their work from Covid testing to helping migrants arrive to the city. New York City has seen over 70 thousand asylum seekers arrive from other states and countries without access to basic healthcare. We believe DocGo is one of the few companies who can provide this service effectively. We found a new contract that DocGo has won worth up to $432 million. We believe this is a one-year contract that could provide upside to consensus revenue estimates of $504 million. In addition, it positions them to win other large deals.
During the investor day, DocGo outlined plans to become a $1 billion revenue run rate company and achieve 20% EBITDA margins by 2025. For reference, DocGo is expected to earn $504 million in revenue with EBTIDA margins of 10% in 2023. We believe DocGo is well on its way to achieving these targets with the additional new contract win and a strong pipeline of opportunities.
Assuming they achieve their goals of $1 billion in revenue at a 20% EBITDA margin and a 20 EV/EBITDA multiple we believe DocGo could become a $38 stock. "Go Doc Go!"
© 2022 by Grow Funds LLC. Registered Investment Advisor. GROW Funds LLC is a California registered investment advisory firm. Registration does not imply any level of skill or training. Neither the information within this article nor any opinion expressed shall constitute an offer to sell or a solicitation or an offer to buy any securities. Investors should have long-term financial objectives. Past performance is no guarantee of future returns. GROW Funds LLC currently owns DCGO shares in its portfolios.