ModivCare Inc. (NASDAQ:MODV) is currently facing a class action securities lawsuit, with shareholders being urged to contact the law firm Levi & Korsinsky by March 31, 2025. The lawsuit alleges that ModivCare engaged in securities fraud, negatively impacting shareholders between November 3, 2022, and September 15, 2024. The company is accused of making false statements and concealing issues in its Non-Emergency Medical Transportation (NEMT) segment, which led to a decline in free cash flow.
The financial challenges faced by ModivCare are evident in its current stock performance. On March 7, 2025, Barrington set a price target of $6 for MODV, while the stock was trading at $2.75, indicating a significant price difference of approximately 81.82%. This suggests that the market has a more pessimistic view of the company's prospects compared to the target set by Barrington.
ModivCare's financial metrics further highlight its struggles. The company has a negative price-to-earnings (P/E) ratio of -0.18, indicating ongoing losses. Its price-to-sales ratio is low at 0.013, suggesting that the stock is valued at a fraction of its sales. Additionally, the enterprise value to sales ratio is 0.086, reflecting the company's valuation in relation to its revenue.
The company's liquidity and cash flow generation are also concerning. The enterprise value to operating cash flow ratio is significantly negative at -37.40, highlighting challenges in generating cash flow from operations. The current ratio of 0.79 suggests potential liquidity issues, as the company may struggle to cover its short-term liabilities with its current assets.
ModivCare's debt situation is another area of concern. The debt-to-equity ratio is notably negative at -8.21, indicating a high level of debt relative to equity. This financial instability, combined with the ongoing lawsuit, presents significant challenges for the company and its shareholders.
