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Convey Health Solutions (CNVY)

Convey is a specialized healthcare technology and services company that is committed to providing clients with healthcare-specific, compliant member support solutions utilizing technology, engagement, and analytics. Convey's administrative solutions for government-sponsored health plans help to optimize member interactions, ensure compliance, and support end-to-end Medicare processes. By combining its purpose-built technology platforms with dedicated and flexible business process solutions, Convey creates better business results and better healthcare consumer experiences on behalf of business customers and partners. Convey's clients include some of the nation's leading health insurance plans and pharmacy benefit management firms. Convey's healthcare-focused teams help millions of Americans navigate the complex Medicare Advantage and Part D landscape.

Company profile

Ticker
CNVY
Exchange
Employees
Incorporated
Location
Fiscal year end
Former names
Cannes Holding Parent, Inc., Convey Holding Parent, Inc.
SEC CIK
Subsidiaries
Cannes Parent, Inc. • Cannes I, LLC • Cannes II, LLC • CHTS, LLC • Convey Health Parent, Inc. • Convey Health Solutions, Inc. • Convey Health Solutions Holdings, LLC • Convey Health Solutions Philippines, Inc. • HealthScape Advisors, LLC • Pareto Intelligence, LLC ...
IRS number
842099378

CNVY stock data

Analyst ratings and price targets

Last 3 months
Current price
Average target
$9.50
Low target
$8.00
High target
$11.00
Barclays
Downgraded
Equal-Weight
$11.00
22 Jun 22
Goldman Sachs
Maintains
Neutral
$8.00
12 May 22

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

10 May 22
26 Jun 22
31 Dec 22
Quarter (USD) Mar 22 Dec 21 Sep 21 Jun 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 20.87M 20.87M 20.87M 20.87M 20.87M 20.87M
Cash burn (monthly) 5.98M 348.83K (no burn) 111.17K 5.22M (no burn)
Cash used (since last report) 17.2M 1M n/a 319.61K 15.01M n/a
Cash remaining 3.67M 19.86M n/a 20.55M 5.86M n/a
Runway (months of cash) 0.6 56.9 n/a 184.8 1.1 n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
28 Mar 22 Campanelli Paul RSU Common Stock, par value $0.01 per share Grant Acquire A No No 0 27,125 0 27,125
28 Mar 22 Timothy Fairbanks RSU Common Stock, par value $0.01 per share Grant Acquire A No No 0 219,711 0 219,711
28 Mar 22 Kyle Stern RSU Common Stock, par value $0.01 per share Grant Acquire A No No 0 162,749 0 162,749
28 Mar 22 Farrell Stephen C RSU Common Stock, par value $0.01 per share Grant Acquire A No No 0 355,561 0 355,561
28 Mar 22 Susana Pichardo RSU Common Stock, par value $0.01 per share Grant Acquire A No No 0 47,468 0 47,468
89.7% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 75 66 +13.6%
Opened positions 17 16 +6.3%
Closed positions 8 14 -42.9%
Increased positions 13 21 -38.1%
Reduced positions 34 19 +78.9%
13F shares Current Prev Q Change
Total value 428.72M 555M -22.8%
Total shares 65.66M 66.39M -1.1%
Total puts 0 0
Total calls 0 0
Total put/call ratio
Largest owners Shares Value Change
TPG GP A 54.7M $357.74M 0.0%
Pura Vida Investments 1.72M $11.25M +16.6%
Wellington Management 1.51M $9.86M +67.6%
Prosight Management 748.13K $4.89M -3.7%
First Pacific Advisors 747.65K $4.89M +3.0%
BLK Blackrock 667.58K $4.37M +2.0%
Tocqueville Asset Management 653.5K $4.27M +35.2%
Vanguard 608.62K $3.98M -0.2%
Invenomic Capital Management 594.35K $3.21M +131.3%
Sectoral Asset Management 467.79K $3.06M -10.9%
Largest transactions Shares Bought/sold Change
Norges Bank 0 -645.13K EXIT
Wellington Management 1.51M +607.95K +67.6%
Millennium Management 90.79K -424.84K -82.4%
Invenomic Capital Management 594.35K +337.4K +131.3%
Pura Vida Investments 1.72M +244.67K +16.6%
BAC Bank Of America 78.27K -235.53K -75.1%
BAM Brookfield Asset Management 0 -185.52K EXIT
ExodusPoint Capital Management 86.23K -175.5K -67.1%
Tocqueville Asset Management 653.5K +170K +35.2%
Valeo Financial Advisors 139.09K -166.49K -54.5%

Financial report summary

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Risks
  • Risks Related to Our Business and Industry
  • Risks Related to Governmental Regulation
  • Risks Related to Information Technology, Data Privacy and Intellectual Property
  • Risks Related to Our Capital Structure, Indebtedness and Capital Requirements
  • If we are unable to retain our existing clients or attract new clients, and sell additional solutions and services to our clients, our business, results of operations or financial condition would be adversely affected.
  • Our client base is highly concentrated and we currently depend on a small number of clients for a substantial portion of our total revenue, and this concentration exposes us disproportionately to effects from altered contracts with these clients.
  • Our growth prospects may be limited, and our business, results of operations or financial condition may be adversely affected, if our clients’ growth prospects are limited or if the size of the total addressable markets in which we compete or expect that we may compete in the future contract or grow at materially lower rates than are currently expected.
  • We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to achieve or maintain profitability.
  • Federal reductions in Medicare Advantage funding could adversely affect our business, results of operations or financial condition.
  • Significant consolidation in the healthcare industry, and decisions by clients to perform internally some of the same solutions or services that we offer, could adversely alter our relationships with clients and harm our business, results of operations or financial condition.
  • We have significantly expanded our business in recent years and, as such, have a limited operating history with certain of our solutions, which makes it difficult to predict our future results of operations.
  • A failure to deliver high-quality member management services to our clients’ members could adversely affect our reputation and our relationship with our clients and could harm our business, results of operations or financial condition.
  • We face significant competition, which may harm our business, results of operations or financial condition.
  • Acquisitions of other businesses or technologies and other significant transactions, including dispositions, involve many risks and such acquisitions could disrupt our business and harm our results of operations or financial condition.
  • Increases in labor costs, including wages, and an overall tightening of the labor market, could adversely affect our business, results of operations or financial condition.
  • Long and unpredictable sales and integration cycles for our solutions may adversely impact our business, results of operations or financial condition.
  • An economic downturn or volatility, including as a result of the ongoing COVID-19 pandemic, could have a material adverse impact on our business, results of operations or financial condition.
  • Achieving market acceptance of new or updated solutions and services is necessary in order for such solutions and services to become profitable and will likely require significant efforts and expenditures.
  • Third parties on which we rely, including to procure inventory for our supplemental benefits solution and to deliver products to health plan members, may not perform satisfactorily or at all, and our reliance on any third party for the distribution of supplemental benefits carries material risks.
  • Our quarterly results of operations may fluctuate significantly due to seasonality.
  • Our financial results could suffer if we are unable to achieve or maintain adequate utilization and suitable billing rates for our consultants, or if we are unable to deliver our services due to factors that disrupt travel to our client sites.
  • Our Advisory Services segment in particular relies on a combination of fixed-fee engagements and performance-based engagements, the profitability of which can be unpredictable.
  • Operating and growing our business may require additional capital, and, if capital is not available to us, our business, results of operations or financial condition may suffer.
  • If we fail to manage future growth effectively, our business, results of operations or financial condition could be harmed.
  • If we are unable to attract, train, motivate and retain senior management and other qualified personnel, our business, results of operations or financial condition could be negatively affected.
  • Our international operations subject us to additional risks which could have an adverse effect on our business, results of operations or financial condition.
  • Contractual relationships with private insurers that are funded by government programs may impose special burdens on us and provide special benefits to those clients.
  • We face inspections, reviews, audits and investigations from health plans. These audits could have adverse findings that may negatively affect our business, results of operations or financial condition.
  • Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.
  • Recent and future developments in the healthcare industry could have a material adverse impact on our business, results of operations or financial condition.
  • We are subject to complex, stringent and evolving laws, regulations and standards relating to data privacy and security (including the collection, storage, use, transfer, and processing of personally identifiable information), including protected health information, and any actual or perceived failure by us to comply with such laws, regulations or standards, or our own information security policies or contractual or other obligations relating to data privacy and security, could adversely affect our business, including our reputation among clients.
  • We are unable to predict what changes to laws, regulations and other requirements, including related to contractual obligations, might be made in the future or how those changes could affect our business and the costs of compliance.
  • Changes in tax rules and regulations, or in interpretations thereof, may materially adversely affect our effective tax rates.
  • Security breaches or incidents, failures and other disruptions of the information technology (“IT”) systems used in our business operations, including the Internet and related systems of our vendors, and the security measures protecting them, and the sensitive information we collect, process, transmit, use and store, may adversely impact our business, results of operations or financial condition.
  • Disruptions in service or damages to our and our vendors’ data center colocation and hosting facilities, public and private cloud subscriptions, distribution centers or other operations centers, or other software or systems failures, could have a material adverse impact on our business, results of operations or financial condition.
  • Interruptions and limitations of the IT systems used in our business operations could have a material adverse impact on our business, results of operations or financial condition.
  • The protection of our intellectual property and proprietary rights requires substantial resources, and protections of our intellectual property and proprietary rights may not be adequate. Any failure to obtain, maintain, protect and enforce our intellectual property and proprietary rights, or failure of our intellectual property and proprietary rights to be sufficiently broad, could harm our business, results of operations or financial condition.
  • If we are unable to protect the confidentiality of our trade secrets, know-how and other proprietary and internally-developed information, the value of our technology could be adversely affected.
  • We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed trade secrets or other confidential information of third parties.
  • Third parties may claim that we or our licensors are infringing, misappropriating or otherwise violating their intellectual property or proprietary rights, and we could suffer significant litigation, the outcome of which would be uncertain, incur licensing expenses or be prevented from selling certain products and solutions.
  • Our solutions depend, in part, on intellectual property and technology licensed from third parties.
  • Our use of open source software could impose limitations on our ability to commercialize our solutions, require substantial resources to monitor compliance with applicable licenses and protect our intellectual property and proprietary rights, subject us to possible litigation and otherwise adversely affect our business.
  • We may be obligated to disclose our proprietary source code to our clients, which may limit our ability to protect our intellectual property and proprietary rights and could reduce the renewals of our services.
  • Despite our level of indebtedness, we are able to incur more debt and undertake additional obligations. Incurring such debt or undertaking such additional obligations could further exacerbate the risks our indebtedness poses to our financial condition.
  • We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
  • We are a holding company and will depend on dividends, distributions and other payments from our subsidiaries to meet our obligations.
  • Changes in the method for determining LIBOR or the elimination of LIBOR could affect our business, results of operations or financial condition.
  • We are an emerging growth company and because we have decided to take advantage of certain exemptions from various reporting and other requirements applicable to emerging growth companies, our common stock could be less attractive to investors.
  • Because we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging growth company” our financial statements may not be comparable to companies that comply with these accounting standards as of the public company effective dates.
  • We have identified material weaknesses in our internal control over financial reporting, and the failure to remediate these material weaknesses may adversely affect our business, investor confidence in our company, our financial results and the market value of our common stock.
  • The price of our common stock may be volatile and may be affected by market conditions beyond our control, and the market price of our common stock may drop below the price you paid to acquire shares of our common stock.
  • Our principal stockholder, TPG, has significant influence over us, and its interests could conflict with those of our other stockholders.
  • As long as our principal stockholder, TPG, owns a majority of the shares of our common stock, we may rely on certain exemptions from the corporate governance requirements of the NYSE available for “controlled companies.”
  • Your percentage ownership in us may be diluted by future issuances of capital stock, which could reduce your influence over matters on which stockholders vote.
  • Future sales of a substantial number of shares of our common stock may depress the price of our shares.
  • We do not anticipate declaring or paying regular dividends on our common stock in the near term, and our indebtedness could limit our ability to pay dividends on our common stock.
  • Our amended and restated certificate of incorporation designates courts in the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, and also provides that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.
  • Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, and Delaware corporate laws, may prevent or delay an acquisition of us, which could decrease the trading price of our common stock.
  • Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities, which could adversely impact our business.
  • We may become involved in litigation, investigations and regulatory inquiries and proceedings that could negatively affect us and our reputation.
  • Our financial results may be adversely impacted by changes in accounting principles applicable to us.
  • If our estimates or judgments relating to our critical accounting policies prove to be incorrect or change, our results of operations could be harmed.
  • Changes in accounting standards issued by the FASB or other standard-setting bodies may adversely affect our financial statements.
  • If securities analysts do not publish research or reports about our business or our industry or if they issue unfavorable commentary or negative recommendations with respect to our common stock, the price of our common stock could decline.
  • We will incur increased costs as a result of operating as a public company, and operating as a public company will place additional demands on our management.
Management Discussion
  • Services revenue was $46.5 million and $43.5 million for the three months ended March 31, 2022, and March 31, 2021, respectively. The $3.0 million increase is driven by $1.9 million attributable to customer membership base increase and $1.7 million by net new consulting projects. This is offset by a decrease of $0.4 million in implementation related fees and $0.2 million in lower data analytics contracts.
  • Products revenue was $50.2 million and $39.1 million for the three months ended March 31, 2022, and March 31, 2021, respectively. The increase of $11.1 million is driven by $7.2 million attributable to the acquisition of HealthSmart and $3.9 million for net new clients and existing client growth of memberships.
  • Cost of services was $25.5 million and $24.0 million for the three months ended March 31, 2022, and March 31, 2021, respectively. The increase of $1.5 million is primarily attributable to higher staffing levels to handle increased support to our existing clients, wage increases and incentives paid to agents to handle increased call volumes.

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