Summary
In my view, the results are and will continue to be too unpredictable given the changes in consideration for the SRx acquisition.
The market is wildly optimistic about the future of this company, in spite of a history of losses.
This is a growth company. Problem is that expenses grow right along with revenue, prompting the usual questions about future revenue and expenses: when will the former outstrip the latter?
Over the past twelve months, the shares of Tabula Rasa HealthCare Inc. (TRHC) are up a staggering 315%. In my view, investors would be wise to take the money and run at these levels. I’ll go through my reasoning by looking at both the financial history here, along with the stock itself. I’ll conclude with a quick appeal to authority. I might normally recommend investors switch to calls in order to reduce the risk present, but at the money calls are too expensive in this case in my view.
About the Company
Tabula Rasa is a healthcare technology company that is disrupting the field of medical safety. They help a growing number of healthcare organizations (last count 182 such organizations) that manage populations with complex healthcare needs. They help these organizations manage the risk of drug interactions amongst the multiplicity of formulations their patients take. As the population ages, they take more drugs, and the interactions amongst a battery of different drugs is often not well understood. The company’s cloud based technology helps solve that problem, thus reducing time under care. The fact that the population of people over the age of 65 is expected to double (to 92 million) by 2060 strongly suggests a growing need for the company’s services. In short, there’s a great deal of growth here.
