Q: Hi team,
Does the slowing revenue growth cause concern for the long term thesis of the company?
Did constellation historically have similar lumpiness quarter over quarter?
Do you still think they can grow revenues 20% annually?
Thanks
Does the slowing revenue growth cause concern for the long term thesis of the company?
Did constellation historically have similar lumpiness quarter over quarter?
Do you still think they can grow revenues 20% annually?
Thanks
5i Research Answer:
The slowdown in TOI's acquisition pace and revenue growth is concerning for sure, given that a lot of optimism has been priced into the share price due to its involvement with CSU. That being said, one year does not make a trend, and historically, CSU also experienced a similar situation in one year where the company’s growth was only 10% (FY2015) and a few years of around 13% (FY2019 and FY2020). Companies are run by people, not machines, over the next ten years, there will be great years, bad years, and so-so years. We would remain bullish on TOI but, at the same time, we would be open enough to change our minds if the operating results do not improve over time.