ASX-listed Pacific Smiles Group Limited (AU:PSQ) released a favourable outlook for FY24 after a strong performance in the calendar year, backed by solid volumes of appointments and fees. In other news, the company also announced that it has turned down the takeover offer from Genesis Capital, calling it an “undervalued” bid. Investors reacted positively to the update, with shares trading up by 2.8% at the time of writing.
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Pacific Smiles Group is among the largest dentist service companies in Australia, with a huge network of over 120 dental centres. The company has around 800 dentists practising in its network.
What’s Happening With Pacific Smile Shares?
Pacific Smile shares started the week on a high note and gained around 18% on Monday after the company received a takeover offer from Genesis Capital for AU$223.4 million. The non-binding cash offer of AU$1.40 per share reflected a premium of 17.2% over the stock’s closing price on the preceding Friday. However, it is at a 12% discount from the stock’s 52-week high of AU$1.59.
Moreover, the company felt the offer price didn’t reflect its brand power, market position in the industry, and strong financials. The proposal also failed to take into account the capital invested by the company during the pandemic, presenting a huge potential for an earnings boost.
Overall, the Pacific Smiles share price is down by 6.5% year-to-date.
Positive Update and FY24 Guidance
During the trading period from the end of FY23 in June until December 20, the company recorded AU$141.1 million in patient fees, up from AU$127.7 million in the same period last year. The company expects its underlying EBITDA to be in the range of AU$26 million to AU$28 million in FY24, higher than the AU$24.1 million reported in FY23. It projects patient fees to be between AU$293 million and AU$297 million.
The company is scheduled to publish its first-half results for FY24 on February 21, 2024.
What is the Forecast for Pacific Smiles?
On TipRanks, PSQ stock has received a Moderate Buy rating based on one Buy and one Hold. The share price target is AU$1.43, which is 2.4% below the current trading price.
