Morgan Keegan Gives Earnings Preview On RadNet

Morgan Keegan's EPS estimate on RadNet RDNT of ($0.03) is $0.03 above the First Call consensus and up from ($0.09) in the prior year period. Morgan Keegan believes a better measure of RadNet profitability is adjusted EBITDA. It has modeled $26.2 million versus $20.5 million in the prior year period. Since adjusted EBITDA is a non-GAAP measure there is no consensus estimate. Morgan Keegan expects the company to continue to generate growth despite continued utilization prressures on imaging services arising from the weak economy and lack of patient visits to referring physicians. Morgan Keegan believes RadNet, as a geographically concentrated operator of multimodality imaging centers, is positioned to consolidate the highly fragmented imaging sector. Medicare reimbursement cuts, combined with managed care utilization management and credentialing efforts, are squeezing small players and physician-owned centers, creating accretive acquisition opportunities in an industry with mid-single digit annual volume growth. Morgan Keegan has a $4.30 PT and Outperform rating on RDNT RDNT closed Tuesday at $3.85