Virtus Health's share price falls

With decent growth prospects and plenty of free cash flow, there's a lot to like about this IVF provider.

Recommendation
Virtus Health's share price falls
View company profile for VRT

Date 12 Oct 2018
Current Price $4.89

Buy
below
Hold
up to
Sell
above
Buy Hold Sell Meter
Max Portfolio Weighting
Business Risk
Medium-High
Share Price Risk
High

IVF provider Virtus Health's share price has fallen 5% since it released its full-year result in August. The company continues to face volatile IVF cycle growth but Virtus remains the market leader, has excellent returns on capital and throws off plenty of cash. Its international operations are also ticking along nicely, while the company also owns a valuable network of day hospitals. What's more, the ongoing loss of key staff at the company's largest competitor, Monash IVF, could provide a long-term benefit by weakening its main competitor in the premium IVF market, particularly in Victoria, where Monash has historically been the stronger player. Virtus sports a forward price-earnings ratio of 13 based on consensus estimates for 2019 and a free cash flow yield of 9.2% - not to mention a fully franked dividend yield of 4.8%. With the stock having settled below our recommended Buy price, we're upgrading to BUY.

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