KEY THEMES
Yesterday, Cleopatra Hospital [CLHO] released Q2 2020 results, with earnings dropping 58% y/y, due to lower revenues and squeezed margins. The stock fell around 2.6% in Sunday’s session, and it’s down c.20% ytd. However, CLHO’s H1 2020 showed small top line growth (i.e. 3%) due to stronger Q1 2020.
We think the weakness in operating performance isn’t much of a surprise given the current challenges created by the pandemic on hospitals. CLHO’s TTM P/E is now at 29x, and while this seems rich, it’s 36% down from its average P/E scored since 2017.
neutral
CLHO: We think suboptimal Q2 2020 results is sort of priced in CLHO’s current market price.