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CareRx
(TSX:CRRX)
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Rating:73Outperform
Price Target:
C$3.50
▲(9.37% Upside)
Action:Reiterated
Date:07/31/26
The score is driven primarily by improving financial performance (return to profitability, solid free-cash-flow generation, and better leverage) and supportive valuation (low P/E plus a ~2.25% dividend yield). These positives are moderated by mixed earnings-call signals—near-term funding headwinds and some liquidity/leverage tightening—while technicals are only mildly constructive with the stock still just below its 200-day average and limited momentum data provided.
Positive Factors
Profitability and cash generation
The return to profitability is supported by meaningful operating and free cash flow rather than earnings alone. Free cash flow equal to about 84% of net income indicates solid conversion, giving CareRx greater capacity to fund operations, reduce debt, and support shareholder returns.
Negative Factors
Thin operating margins
Although CareRx is profitable, its modest EBIT and EBITDA margins leave limited protection against cost increases or weaker operating volumes. This constrained operating leverage means relatively small changes in reimbursement, funding, or efficiency can have a disproportionate effect on earnings and cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability and cash generation
The return to profitability is supported by meaningful operating and free cash flow rather than earnings alone. Free cash flow equal to about 84% of net income indicates solid conversion, giving CareRx greater capacity to fund operations, reduce debt, and support shareholder returns.
Read all positive factors
CareRx (CRRX) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$201.81M
Dividend Yield2.51%
Average Volume (3M)11.15K
Price to Earnings (P/E)7.4
Beta (1Y)0.11
Revenue Growth2.96%
EPS GrowthN/A
CountryCA
Employees1,483
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)0.42
Shares Outstanding63,514,038
10 Day Avg. Volume2,702
30 Day Avg. Volume11,147
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)2.19
Price to Sales (P/S)0.65
P/FCF Ratio10.92
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$4.75Price Target Upside48.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)0.14
Revenue Forecast (FY)C$383.38M
CareRx Business Overview & Revenue Model
Company Description
CareRx Corporation, operating with its subsidiaries, specializes in delivering tailored pharmaceutical services to Canada's senior demographic. The company manages a vast network of medication dispensing facilities, which are responsible for provi...
How the Company Makes Money
CareRx makes money primarily by providing pharmacy services to seniors living in LTC and retirement communities. Its core revenue stream is prescription dispensing and medication distribution: CareRx fills residents’ prescriptions, packages and de...
CareRx Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Neutral
The call presented a mix of positive operational and commercial progress (modest revenue and bed growth, a material ~3,000-bed contract win, dividend increase, ongoing efficiency actions and clinical/brand recognition) alongside near-term financial headwinds (a ~$2.0M funding hit from Ontario ward-bed changes, lower net income, slight margin compression, reduced quarter-end cash and higher net debt). Management expects the 3,000-bed win to be accretive over time and recovery of the ward-bed impact only after redevelopment in 2027. Overall the company shows constructive operational momentum but faces identifiable short-term funding and liquidity pressures.Positive Updates
Revenue and Bed Growth
Q2 revenue $93.6M vs $91.4M in Q2 2025, up ~2.4% YoY; average beds serviced 91,719 vs 90,048 in Q2 2025, up ~1.9% (1,671 net beds).
Negative Updates
Ontario Ward Bed Funding Change
Change in funding for certain unoccupied ward beds effective April 1, 2026; management expects a full-year top-line impact of approximately $2.0M, with roughly $667K of the impact felt in Q2; recovery contingent on redevelopment of ward beds and not expected to be fully realized until late 2027.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Bed Growth
Q2 revenue $93.6M vs $91.4M in Q2 2025, up ~2.4% YoY; average beds serviced 91,719 vs 90,048 in Q2 2025, up ~1.9% (1,671 net beds).
Read all positive updates
Company Guidance
Management guided that the Ontario ward‑bed funding change will be a roughly $2.0M headwind for 2026 (about $667k hit was realized in Q2), with the company expecting to recapture that revenue once ward rooms are redeveloped—likely by late 2027; they also confirmed semaglutide generic supply/margin benefits are expected to materialize in 2027. They will onboard approximately 3,000 retirement beds in Q3 (all onboarding to complete within the quarter, with the full revenue/EBITDA benefit showing in Q4) and remain focused on an organic target of 6,000–8,000 bed additions by year‑end (about halfway to the low end today). Key Q2 metrics cited alongside this guidance: revenue $93.6M (vs. $91.4M LY), adjusted EBITDA $8.0M (margin 8.6% vs. 8.8% LY), net income ≈ $0.4M (vs. $0.6M LY), cash from operations $3.7M, cash $9.6M, net debt $29.1M (net debt/adjusted EBITDA 0.9x), and a 10% dividend increase to $0.022/share (payable Oct 8; $1.3M of dividends paid subsequent).CareRx Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
77
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 376.80M | 370.24M | 366.71M | 370.75M | 381.73M | 262.63M |
| Gross Profit | 95.15M | 92.63M | 108.06M | 84.72M | 109.93M | 75.28M |
| EBITDA | 29.64M | 28.53M | 23.90M | 24.65M | -610.00K | 9.01M |
| Net Income | 26.87M | 26.13M | -4.50M | -5.41M | -34.35M | -22.73M |
Balance Sheet | ||||||
| Total Assets | 243.16M | 253.02M | 223.54M | 231.89M | 264.54M | 282.82M |
| Cash, Cash Equivalents and Short-Term Investments | 10.05M | 14.40M | 9.08M | 7.03M | 28.37M | 35.63M |
| Total Debt | 76.33M | 77.92M | 82.63M | 97.86M | 135.22M | 125.57M |
| Total Liabilities | 133.56M | 143.51M | 139.31M | 150.37M | 200.08M | 200.53M |
| Stockholders Equity | 109.60M | 109.50M | 84.23M | 81.53M | 64.46M | 82.29M |
Cash Flow | ||||||
| Free Cash Flow | 23.80M | 21.95M | 29.88M | 18.68M | 8.72M | 153.00K |
| Operating Cash Flow | 27.40M | 27.54M | 37.99M | 27.38M | 22.33M | 7.27M |
| Investing Cash Flow | -9.00M | -8.26M | -7.92M | -12.31M | -16.60M | -93.18M |
| Financing Cash Flow | -17.52M | -14.44M | -28.02M | -36.40M | -12.99M | 101.91M |
CareRx Technical Analysis
Negative
3.20
Price Trends
3.34
Negative
3.38
Negative
3.55
Negative
Market Momentum
-0.04
Negative
44.38
Neutral
41.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CRRX, the sentiment is Negative. The current price of 3.2 is below the 20-day moving average (MA) of 3.21, below the 50-day MA of 3.34, and below the 200-day MA of 3.55, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 44.38 is Neutral, neither overbought nor oversold. The STOCH value of 41.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CRRX.
CareRx Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$201.81M | 7.44 | 25.79% | 2.56% | 2.96% | ― | |
73 Outperform | C$2.98B | 23.45 | 36.33% | 1.67% | 31.14% | 34.48% | |
68 Neutral | C$50.64M | 24.77 | 6.95% | ― | 18.35% | 1021.05% | |
62 Neutral | C$246.00M | 8.51 | 45.36% | 2.38% | 2.64% | -56.04% | |
62 Neutral | C$1.07B | 158.89 | 0.44% | ― | 38.54% | ― | |
54 Neutral | C$2.25B | 38.67 | 6.58% | 4.65% | 16.11% | 31.75% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
TSE:CRRX
CareRx
3.19
-0.06
-1.73%
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CareRx Corporate Events
Business Operations and StrategyPrivate Placements and Financing
CareRx Secures Larger, More Flexible Credit Facility with National Bank of Canada
Positive
Aug 27, 2026
CareRx Corporation has entered into a new credit agreement with National Bank of Canada that replaces its existing credit facility and significantly expands its access to capital. The arrangement is designed to support continued growth in its phar...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.