The average target price of MCGS.QA is 5.5 and suggests 21% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 5.5. This translates into 21% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 5.5. This suggests 21% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Medicare Group Q.P.S.C. provides healthcare and treatment services in Qatar. The company operates hospitals, medical clinic centers, and outpatient clinics. It also provides home nursing, physical therapy, and nutrition services. The company was formerly known as Al Ahli Specialised Hospital Company Q.P.S.C. Medicare Group Q.P.S.C. was incorporated in 1996 and is based in Doha, Qatar.

Qatar

Medicare Group Q.P.S.C.

Healthcare

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been strong and significantly above its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends annually. 

MCGS.QA reported revenue of QAR 521mn in the last 12 months, down 0% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 3% from FY24 to QAR 0.22. Market expects EPS to reach QAR 0.23 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 9ppts over past six months and grown 6ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 20.4% in the last 12 months, up from 19.9% in FY23. 

Historically, MCGS.QA has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 11.9%, down from 13.5% in FY23. 

Medicare Group Q.P.S.C. reported a return on equity (RoE) of 6.1% in the last 12 months, down from 6.4% in FY23. The market consensus projects an RoE of 5.4% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 4.5% in the last 12 months, a decrease from 4.9% in FY23. The market analysts predict that RoA will be 4.0% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to 5.0%, below the peers. The consensus estimate for FY24 for RoCE is 4.7%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.6 in the past several years. This ratio implies a good shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

MCGS.QA has below average trading liquidity. The average private investor can sell his common position in the stock in a single trading day. Liquidity is usually quite stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, negligible return on capital, and poor working capital management.

In highly turbulent market conditions, MCGS.QA is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, MCGS.QA is not overly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will remain relatively stable. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

From both historical and forecast perspectives, the stock is fairly priced compared to similar stocks. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITDA, trading at neutral levels on P/FCF. 

Medicare Group Q.P.S.C.

QAR 4.61

5

Medicare Group Q.P.S.C.

QAR 4.61

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

QAR 4.61

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