ModivCare downgraded to Hold from Buy at Lake Street

Lake Street analyst Brooks O’Neil downgraded ModivCare to Hold from Buy with a price target of $50, down from $100. ModivCare reported Q4 results that were generally in line with the firm’s forecast, but provided guidance for Q1 and 2024 “well below” the firm’s estimate as “several new speedbumps showed up” at the end of Q4 and into Q1, including unexpected contract attrition, delayed payment from a single large client and higher than normal rider utilization, the analyst tells investors. The firm is reducing its forecast for 2024 and compares its downgrade to a “needed pitstop during a long race,” explaining “We fully expect to get back onto the track, but it is prudent to allow the mechanics time to do their job in an effort to insure we get all the way to the finish line.”