DCGO

DocGo Inc ($DCGO) Executives Load Up on Shares After Stock Collapse - Value Opportunity Amid Earnings Struggles?

05/14/2025 21:54

Mobile healthcare and medical transportation provider DocGo Inc. ($DCGO) has captured investor attention after its top executives made significant stock purchases following a precipitous decline in share price due to disappointing earnings. DCGO has experienced extreme volatility over the past six months. After reaching a peak of $5.60 in mid-February, the stock plummeted more than 70% in just three months, hitting $1.40 on May 9th. This stands in stark contrast to the relatively stable performance of the S&P 500 index during the same period. The primary catalyst for this sharp decline has been a series of disappointing financial results. On May 9th, DocGo reported its Q1 2025 earnings, posting a loss of 9 cents per share, significantly worse than analysts' expectations of a 2-cent loss. Revenue plunged 50% year-over-year to $96.03 million, with a net loss of $9.41 million for the quarter. Particularly troubling was the performance of the company's core mobile healthcare services segment, which saw revenue collapse from $143.9 million in the year-ago quarter to just $45.2 million, representing a staggering 69% decline. The company attributed this dramatic reduction primarily to policy changes affecting government contracts. What's particularly noteworthy is that immediately following this price drop, on May 14th, DocGo's leadership team collectively purchased shares in a significant cluster-buying event. According to SEC filings, CEO Lee Bienstock acquired 15,000 shares at an average price of $1.54 per share, representing approximately $23,100. Additionally, CFO Norman Rosenberg purchased 15,000 shares (about $22,050), CCO Stephen Sugrue bought 10,000 shares (roughly $14,400), and board member Stephen Klasko acquired 15,000 shares (approximately $22,350). This cluster buying, totaling 55,000 shares worth about $81,900, signals that key decision-makers see value in the company at current price levels. It's especially significant that these purchases occurred when the stock was trading near its 52-week low. This contrasts with insider selling activity in mid-December 2024, when officer Ely D Tendler and director Etalvina Leite sold 23,088 and 16,500 shares respectively, at prices ranging from $4.34 to $4.44. Despite its challenges, DocGo maintains some positive financial indicators. As of March 31, 2025, the company held a solid cash position of approximately $79 million, with a current ratio of 2.44, indicating healthy short-term financial stability. Additionally, its debt ratio stands at a manageable 20.16%. However, the company recently revised its annual revenue guidance significantly downward, from $410-450 million to $300-330 million. Analysts project an average revenue decline of 21% annually over the next three years, suggesting continued difficulties ahead. On a more positive note, the medical transportation segment has shown relative stability, with revenue actually increasing slightly year-over-year to $50.8 million. The company is also seeking new growth drivers through strategic initiatives, such as its recent acquisition of PTI Health to enhance its mobile lab collection and phlebotomy services. Investors must carefully weigh whether the current price level around $1.50 represents an attractive entry point from a long-term perspective, considering both the insider buying signals and the company's ability to address its structural challenges. The stock's current valuation metrics, including a P/S ratio of 0.31 and a P/B ratio of 0.48, indicate significant undervaluation that may interest long-term investors. The upcoming quarterly results, along with potential resolution of government contract issues and continued growth in non-core business segments, will likely be crucial factors determining the future direction of $DCGO's stock price.

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