NRC Health Common Stock (NRC)

FairStock Score: 36/100 — MIXED

Key Financials

Strengths

• Generates $17 million in annual free cash flow (4.3% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 51.2% demonstrating efficient capital deployment
• Attractive 3.2% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($3) with negative 548% margin of safety—limited downside protection
• High leverage at 5.74x debt-to-equity increases financial risk and interest expense burden
• Revenue declining at 4.6% year-over-year signals potential demand weakness or market share loss

AI Analysis

NRC Health Common Stock is a micro-cap healthcare company valued at $389 million. Revenue stands at $137 million. From a quality standpoint, NRC shows solid Piotroski F-Score of 7/9 and Altman Z-Score of 2.0 in the grey zone. On valuation, the stock is trading at a premium 34.5x earnings, with trades far above its Graham Number ($3) with no margin of safety. Growth dynamics show revenue growing at -4.6% and profit growth of -72.6%. The 3.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 36/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $17 million in annual free cash flow (4.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 35x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer