R1 RCM stock suffers record selloff of more than 51% after rare profit miss, physician customer missed payment

Shares of R1 RCM Inc.
RCM,
-51.53%
plummeted a record 51.7% toward a 4 1/2-year low in afternoon trading Tuesday, after provider of revenue cycle management services to health care providers missed quarterly profit expectations for the first time post-pandemic, and said a customer facing financial challenges failed to meet a payment deadline. Separately, the company said long-time Chief Executive Joe Flanagan will step down from the role after almost 10 years with the company. The stock was headed for its biggest one-day drop since going public in May 2010. Earlier Tuesday, the company said it swung to a third-quarter net loss of $29.5 million, or 7 cents a share, from net income of $17.0 million, or 5 cents a share, in the year-ago period. Excluding nonrecurring items, such as a $9.5 million increase in allowance for credit losses, FactSet said adjusted earnings per share of 8 cents missed the consensus estimate of 14 cents. The company disclosed that the increased allowance for credit losses was for a physician customer facing “financial challenges” that was unable to make a “contractually required payment” on Sept. 30. The last time the company missed EPS expectations was for the fourth quarter of 2019. Revenue for the latest quarter grew 30.6% to $496.0 million, but was below the FactSet consensus of $523.7 million. The company cut its 2022 revenue guidance range to between $1.79 billion and $1.80 billion from between $1.85 billion and $1.87 billion. The stock has sunk 73.2% over the past three months while the S&P 500
SPX,
+0.20%
has eased 7.7%.