Why did Signify Health (SGFY) soar over 30% during pre-market trading?

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Why did Signify Health (SGFY) soar over 30% during pre-market trading?

 Why did Signify Health (SGFY) soar over 30% during pre-market trading?
Image source: © Shutter999 | Megapixl.com

Highlights:

  • SGFY stock soared over 37 per cent in the pre-market session on August 22.
  • Several companies are reportedly showing interest in bidding for the home healthcare services firm.
  • The company's second-quarter fiscal 2022 revenue grew 16 per cent YoY.

The Signify Health, Inc. (NYSE: SGFY) stock caught investors' attention on Monday as it surged during the pre-market trading hours.

The SGFY stock noted a surge of over 37 per cent on Monday morning . So what could be the possible reasons that could have bolstered gains in the stock of the home healthcare services firm? Let's find out before exploring its latest quarter earnings and stock performance.

Why is Signify Health, Inc. (NYSE: SGFY) gaining attention?

The stock of Signify Health had created a buzz on Wall Street after reports claimed that Amazon.com, Inc. (NASDAQ: AMZN) is among the potential firms that are expected to bid for the healthcare firm.

The leading e-commerce firm is reportedly competing with CVS Health Corporation (NYSE: CVS), among others, for the healthcare firm. Some reports suggest that UnitedHealth Group Incorporated (NYSE: UNH) is also looking to acquire Signify Health.

The bids are reportedly expected to take place around Labor Day. However, it could be possible that a potential bidder could agree to a deal earlier.

Signify Health Inc. (SGFY) earnings highlights for fiscal 2022 second quarterSource: ©Kalkine Media®; © Canva via Canva.com

Financial highlights:

Signify Health posted its Q2 FY22 earnings on August 3. The home healthcare service provider noted a 16 per cent jump year-over-year (YoY) in its Q2 FY22 revenue of US$ 246.2 million.

Its attributable net loss totalled US$ 370.5 million, or US$ 2.10 per diluted share in Q2 FY22, while no income or loss was recorded in the year-ago quarter.

Talking about its guidance, the firm expects its revenue from the Home & Community Services (HCS) segment to be between US$ 800 million and US$ 810 million in fiscal 2022.

Bottom line

The SGFY stock was priced at US$ 29.15 at 8:26 am ET on August 22, up 37.5 per cent from its previous closing price. The prior session on August 19 closed at US$ 21.20, representing a slump of 2.44 per cent.

Meanwhile, the reported bidding interest of Amazon comes a month after it nodded to acquire the brick-and-mortar doctor's office operator and telehealth solutions provider, One Medical for US$ 3.49 billion. This report marks the increasing interest of the e-commerce giant in the healthcare segment.

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