HireRight Holdings Corporation (NYSE: HRT) has been flying in today’s premarket session, with market participants closely monitoring the stock’s trajectory. After relative inactivity and a 3% downward slide, HRT shot up 19.3% in merely thirty minutes in the after-hours session. Although this growth had later stabilized at 10.9%, the market stays optimistic, hoping for this growth spurt to persist longer. Given that the bounce-back in price is not part of a frenzy-based pump and dump strategy, the growth may sustain. The price shoot-up links to a recent earnings release that clearly indicates a serious undervaluation with HRT, until yesterday.
HRT Earnings Release
The tech-driven workforce management and solutions provider traded publicly only since October, thereby leaving it largely unknown to market participants. After announcing third-quarter results for 2021 in November, this is the first-time progression in earnings will be assessed. For HRT, it is also the first time since annual results for HireRight come under the spotlight. This is why the incident triggered such a high-volume response in the market.
The earnings report was highly impressive to market participants, and highlighted the following core domains:
- Annual revenue growth of 35.1%, increasing from $540.2M to $730.1M. The growth indication in this metric is immense, from 2020 to 2021. It further emphasizes the company’s performance was not an anomaly during the Covid period.
- 2020’s operating loss of $12.1M turned around in 2021 to deliver an operating profit of $56.7M. A turnaround of such a magnitude is staggering and points to the excellence in managerial approaches and resource allocation.
- Net loss from 2020 of $92.1M reduced to a mere $21.3M in 2021. Although still not a direct enhancement in value, the shift portrays a marked improvement for HRT.
- Adjusted Diluted EPS for 2021 improved at $1.24 per share, from an adjusted diluted loss per share of $0.02
HRT Business Prospects
The financial performance of HRT attests to its value-enhancing capacity for investors in the company. The nature of its services makes it an ideal tool for organization and workforce management in a remote, post-Covid context. With news resurging of wide-scale lockdowns in China, and potentially in Europe, HRT solutions once again come under the spotlight. The company holds sufficient funds to expand and achieve economies of scale and service optimization.
HRT has been flying in the aftermarket following a brilliant earnings release, demonstrating financial improvements to a significant degree. Combining this with its innovative business model, and a possible resurgence of lockdowns, the business is poised to realize further growth and value addition.