Analyst Raises Joint Price Target by 66.7% Following Strong Q1 Earnings

B. Riley Securities's Jeff Van Sinderen raised their price target on Joint (NASDAQ: JYNT) by 66.7% from $12 to $20 on May 6, 2024. The analyst maintained their Strong Buy rating on the stock.

According to Van Sinderen, Joint's Q1 2024 earnings report exceeded consensus estimates across multiple key metrics. The company reported revenue, gross margin, and EBITDA numbers that outperformed expectations. Additionally, management highlighted positive conversion and attrition trends, indicating a promising outlook for the rest of the fiscal year.

In Q1 2024, Joint reported earnings per share (EPS) of $0.06, surpassing the Zacks Consensus Estimate of $(0.03) but falling short of Q1 2023's $0.15 by 60%. The company's revenue for the quarter stood at $29.72 million, beating the Zacks Consensus Estimate by 1.91% and showing a 5% increase compared to the same period in 2023.

Furthermore, Joint achieved a 9% year-over-year growth in system-wide sales, amounting to $126.3 million. The company also experienced a 3% increase in system-wide comparable sales. However, franchise license sales declined by 11.8% compared to the previous year, with only 15 licenses sold in Q1 2024.

Looking ahead, Joint's management provided guidance for FY 2024, projecting system-wide sales in the range of $530 million to $545 million. They also anticipated mid-single digits system-wide comparable sales growth and expected to open 60 to 75 new franchised clinics.

President and CEO Peter D. Holt expressed his optimism, stating, "We began 2024 focused on increasing new patient counts, improving existing patient engagement, and refranchising the vast majority of our corporate portfolio, and we are making solid progress." Holt emphasized the company's revenue growth and improved bottom-line performance year-over-year. In addition, he highlighted the significant increase in franchise license sales compared to the previous quarter, indicating strong interest in Joint's franchise concept.

To facilitate the refranchising process, Joint has been engaging in negotiations with multiple qualified franchisees. The company's endeavor in this area has been met with such enthusiasm that they have enlisted the support of an investment bank specializing in refranchising, aiming to expedite the process and generate value for stakeholders.

Following the release of these positive earnings results, Joint's stock price experienced a significant increase. Since the Q1 2024 report on May 2, the stock has risen by 22.8%. Compared to the previous year, the stock is up by 7.5%. However, it is worth noting that during this period, Joint has trailed behind the S&P 500, which has shown a 25.2% increase.

Jeff Van Sinderen, the B. Riley Securities analyst who raised the price target on Joint, is ranked in the top 2% of Wall Street analysts by WallStreetZen. With an impressive average return of 39% and a win rate of 57%, Van Sinderen specializes in analyzing companies in the Industrials and Communication Services sectors, among others.

Joint Corp. is a company that develops, owns, operates, supports, and manages chiropractic clinics. The company operates in two segments, Corporate Clinics and Franchise Operations. Through direct ownership, management arrangements, franchising, and regional developers, Joint has established approximately 700 locations across the United States. The company was incorporated in 2010 and is headquartered in Scottsdale, Arizona.

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