On Tuesday, September 12, Inovalon (NASDAQ:$INOV) shares increased after the cloud-based healthcare platform provider disclosed that UnitedHealthcare, which is a business of UnitedHealth Group (NYSE:$UNH), had signed a five-year deal to use its ONE platform.
What Happened?
The public has now been made aware that UnitedHealthcare has officially entered into a five-year deal with Inovalon to use the ONE platform. It appears that this deal is an expansion of the relationship between the two companies. Here’s what Keith Dunleavy, CEO of Inovalon, had to say about the deal:
“As the trend toward quality and value-based care models increases, the sophistication of the technologies needed to achieve meaningful and differentiated results has never been more critical to success. We are very pleased to be expanding our partnership with UnitedHealthcare, a clear industry leader, helping to support their data-driven approach to care quality.”
As of right now, no financial details have been announced, therefore it is still unclear as to whether the 20% jump in Inovalon’s stock price was just an overreaction. In recent quarters, Inovalon’s revenue has slumped, down 2% last year and down 10.7% year over year during Q2 of 2017. However, Inovalon’s guidance predicts second-half revenue will increase roughly 17% year over year, which is an outlook that likely includes the UnitedHealthcare win.
What Does the Future Entail?
Inovalon shares have decreased since the company first went public in 2015. The steady decline caused a series of steep drops last year, which was driven by disappointing revenue. Despite Tuesday’s increase, Inovalon stock is still down roughly 45% from its all-time high.
That said, the UnitedHealthcare deal is likely to contribute to Inovalon’s return to growth during the second half. And after two years of disappointment for investors and shareholders, Inovalon has finally delivered some good news.
Featured Image: twitter
