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Why the Medadvisor (ASX:MDR) share price is up 11% this week

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Medadvisor Ltd (ASX: MDR) shares are performing strongly this week after the company released its quarterly report yesterday. The Medadvisor share price jumped 19.12% to 40.5 cents as the update for the quarter ending 31 December 2020 hit the ASX on Thursday.

However, the small-cap medical management platform’s share price has since pulled back to 40 cents at the time of writing.

What’s driving the Medadvisor share price?

The Medadvisor share price has been on the move after the company announced record operating revenue. Full year revenue for the company was $56.1 million, up 24% on the prior corresponding period. However, stealing the headlines was the company’s half year revenue of $34.3 million. This equates to a rise of 79% over the prior half.

In terms of operating cash flow Medadvisor reported cash receipts of $10.7 million for the quarter. These results were largely driven by strong performance in the company’s US subsidiary Adheris, which it acquired in November 2020. As such, Medadvisor closed the quarter with $21.2 million in cash.

Furthermore, Medadvisor expects demand for vaccination delivery via retail pharmacies to grow, which will accelerate growth in the company’s US health services. Medadvisor’s vaccine program product was its highest revenue generator in 2020.

Management comments

Medadvisor CEO and Managing Director Robert Read welcomed the news saying:

This quarter validates the strong financial performance of Adheris and the opportunities that are available from MedAdvisor ownership. As a result, our revenues are up 188% year-on-year and approximately 80% of our revenue is now generated in the US. We are now working with our global customers at scale across multiple regions.

About the Medadvisor share price

Medadvisor is a management platform that aims to simplify the process of taking medication. The company uses its software to connect users to tools and education materials from their preferred pharmacy.

Medadvisor operates across three main countries. In the US, its program can reach 1 in 2 Americans for opt-out health programs via approximately 25,000 pharmacies. This was made possible by the company’s acquisition of US-based Adheris for US$27.5 million.

In Australia, Medadvisor has connected over 1.8 million users through 60% of Australian pharmacies. The company has also recently launched into Asia and the United Kingdom.

The Medadvisor share price has risen over 11% year to date but is still trading more than 40% lower than its 52-week high achieved in May last year.

Based on the current Medadvisor share price, the company has a market capitalisation of around $122 million.

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Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of MedAdvisor. The Motley Fool Australia has recommended MedAdvisor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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