Rennova Health Inc (OTCMKTS:RNVA) has felt the full wrath of Wall Street over the past year, depicted by 90% loss in market value. However as the saying goes ‘ buy low sell high’ it might be time to pay close watch to the stock, given that it is starting to live up to our previous analysis.A major undoing to Rennova Health has always been concerned about its ability to generate revenues. However, if recent developments are anything to go by, then the company is on course to hit the $1 million mark in monthly revenues.Revenues of up to $1 million should go a long way in strengthening investor confidence thus propel the stock up the charts to levels it was trading at, two years ago. The stock is currently trading at all-time lows after feeling the full effect of short sellers. RNVA Daily ChartTaking into considerations recent developments that underscore growth in the company’s business network and core business, it appears the stock is well positioned for more gains going forward.Before we look at the catalysts likely to push the stock from the current lows, let us review what Rennova Health does in its pursuit of shareholder value and growth.Rennova Health Business OverviewRennova Health bill itself as a provider of diagnostics and supportive software solutions to healthcare providers. The company has three main business segments: clinical laboratory operations, Supportive software solutions and informatics operations.Its core business revolves around clinical laboratory blood and urine testing. It also delivers products and services, including laboratory diagnostics and healthcare technology solutions33% Spike Shares of Rennova Healthcare experienced a 33% spike in the company announcing the signing of a definitive agreement for the acquisition of Tennova Healthcare, an acute care hospital in Jamestown Tenn. The transaction should close in the second quarter of 2018, subject to customary and regulatory approvals.Investors pushed the stock up the charts on the fact that the new hospital will go a long way in strengthening the company’s recurring revenue base. The fully-operational 85-bed facility creates numerous synergies for Rennova Health as the company moves to target a greater number of healthcare providers.
“This acquisition further demonstrates our commitment to expanding Renovo’s rural hospital model to provide necessary services to patients while securing more predictable recurring revenues. The synergy of management and services in a close geographic location creates numerous efficiencies for Rennova and will allow us to support a greater number of health care providers and residents in the local area," said CEO Seamus Lagan.
A further indication of Rennova Health growing revenue base is the fact that its wholly owned subsidiary Big South Fork Medical Center (BSFMC) has already started to receive payments from private insurers. Received payments underscore the function of BSFMC billing process, which the company expects to receive payments from federal payor soon.Opened on August 8, 2017, the unit offers services that include, 24/7 emergency and radiology service not limited to X-ray, CT scan, ultrasound, nuclear medicine and MRI. The hospital had annual revenues of about $12 million in 2015, a feat that Rennova Health hopes to replicate this year.Even as the company continues to make a name for itself as a healthcare facility operator and owner, its diagnostic business, a key source of revenue, is also experiencing robust growth. The College of American Pathologists has already taken note of the company’s flagship Laboratory Epic Reference Labs Inc. for meeting the Laboratory Accreditation Program Standards for Accreditation.The accreditation is a testament to the quality of services and accuracy that the Rennova Health offers. The accreditation should go along way in building the company name among healthcare providers thus drawing in more revenue-generating deals.
“We believe that growth in our diagnostics business will be based on the quality of service we provide combined with payer contracts. We are pleased with our achievements in both of these areas,” said Mr. Lagan.
The laboratory has already secured a number of in-network contacts with health care providers over the past two years. It currently has 13 contracts in place including one with United Healthcare. The unit is also registered with Medicaid in 26 states.Bottom Line Rennova Health has reached a pivotal stage in its pursuit of recurring revenues and monthly revenues of more than $1 million. The acquisition of Tennova Healthcare underscores the company’s commitment to pursuing growth opportunities through acquisitions that have the potential to generate more revenues.Accreditation of its flagship laboratory unit is another testament to the company’s growing credibility in the diagnostics business. The company remains well positioned to sign more deals capable of generating significant revenues needed to generate positive cash flow.The company also remains on track to pick up a Medicare number that will allow it to receive payment from federal agencies, Medicare and Medicaid. That said, Rennova Health looks like a cheap buy at the current valuation given the positives going its way.We will be updating our subscribers as soon as we know more. For the latest updates on RNVA, sign up below!Disclosure: We have no position in RNVA and have not been compensated for this article.Image courtesy of Fleep Tuque via Flickr
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