What Happened?
Shares of diagnostic imaging company RadNet (NASDAQ: RDNT) jumped 4.7% in the morning session after an analyst at Raymond James raised their price target on the shares, citing the company's recent better-than-expected second-quarter financial results. The analyst boosted the price target to $75 from $66, maintaining a "Strong Buy" rating. The move follows RadNet's strong Q2 report, where the medical imaging company posted record revenue of $498.2 million and adjusted earnings per share of $0.31, significantly surpassing Wall Street's expectations. Growth was driven by increased volumes in key procedures, including a 16.2% rise in PET/CT scans. Citing the strong performance, management raised its full-year guidance for adjusted EBITDA. Adding to the positive outlook, RadNet also announced an expected $4-5 million tailwind from 2026 Medicare pricing, a reversal from a previously anticipated headwind.
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What Is The Market Telling Us
RadNet’s shares are quite volatile and have had 15 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock gained 3.3% on the news that positive inflation data fueled hopes for an interest rate cut by the Federal Reserve. The latest Consumer Price Index (CPI) report showed inflation rose by a modest 0.2% in July and 2.7% over the last year. This cooler-than-expected data prompted a significant market rally, with the S&P 500, Dow, and Nasdaq all climbing as investors grew more optimistic. The prevailing view is that easing inflation gives the central bank room to lower interest rates. Lower rates typically reduce borrowing costs for businesses and make stocks more attractive relative to bonds, contributing to widespread gains across sectors like healthcare.
RadNet is down 3.6% since the beginning of the year, and at $67.64 per share, it is trading 21.7% below its 52-week high of $86.38 from November 2024. Investors who bought $1,000 worth of RadNet’s shares 5 years ago would now be looking at an investment worth $3,832.
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