The last time the Healius Limited
(ASX: HLS) share price was hovering at current levels was in 2018 when the winter Olympic games was in Korea.
What has happened to the Healius share price since then and how will the recent trading update impact it?
Healius is a healthcare business that provides pathology, diagnostic imaging, medical centres and low-cost fertility services, such as IVF.
HLS share price
Solid growth across the pathology segment
In terms of COVID testing, Healiys recently reached 3 million COVID tests in total with over 800,000 completed in the third quarter (Q3) of FY21. This was consistent with the first half of FY21 (1H FY21).
Healius notes commercial COVID testing is growing.
In relation to non-COVID revenue, this is 5% ahead of the prior corresponding period (PCP) in Q3 FY20 and growing compared to 1H FY21.
Imaging segment grows as well
The imaging segment recorded a jump of 8% on the PCP and Victoria is showing signs of progressive recovery.
Hospitals experience growth
There was continual growth in the hospitals segment as it surged by 25% relative to PCP, which was driven by Montserrat.
Also, Westside Private Hospital performed close to 1,000 procedures in March, its best month to-date, and successfully completed its first hip and knee replacement surgeries.
Healius noted the Adora Fertility continued to trade profitably.
My thoughts
Whilst its important to monitor growth in revenue, investors should also consider monitoring its competitors.
It competes with Sonic Healthcare Limited (ASX: SHL) and Capitol Health Ltd (ASX: CAJ).
It seems Healius was a big beneficiary of the pandemic, so the key question is whether this segment will continue over the long term.
Given the rise in revenue since the pandemic, it’s not surprising that the Price to Earnings ratio (P/E ratio explained) is higher than the industry average.
Whilst testing remains important in a lot of countries, I think testing will steadily reduce over time as the vaccine rolls out.
As a result, I think growth will likely taper off over the long term.
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