Investment Research report

Hill-Rom Holdings, Inc.

NYSE:
hrc
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Research Overview

INDEX:
S&P 500
Sector:
Healthcare
Position:
Short
Date:
Oct 29, 2019

After conducting a forensic financial and accounting review, Spruce Point believes Hill-Rom Holdings, Inc. (NYSE: HRC), a low-quality medical equipment roll-up, is rapidly approaching the end of its current growth cycle, has few, if any, credible alternatives to sustain future growth, and is being forced to "pitch" a new financial outlook a year ahead of schedule. Based on our investigation, we estimate 25% to 55% downside risk, or $45 - $75 per share.

The report highlights several key concerns with the company, including:

  • We believe that non-stop M&A and confusing math mask a slow-growing business
  • We find evidence of slowing revenue from new products
  • We believe that a business inflection will likely translate into an earnings reset
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