What You Need to Know About Change Healthcare’s (CHNG) IPO Tomorrow

Change Healthcare (CHNG), a healthcare software platform, is expected to IPO on Thursday, June 27. At a price range of $16-$19 per share, the company plans to sell up to $700 million in common stock and an additional $250 million in tangible equity units. At the midpoint of the IPO price range, CHNG will have an expected market cap of…

$5.2 billion and currently earns an attractive rating.

Even if you’re not familiar with CHNG, there’s a good chance you’ve interacted with the company. CHNG facilitated 14 billion healthcare transactions with a total value of ~$1 trillion last year, or roughly 1/3 of all U.S. healthcare expenditures. Their customer base includes over 900,000 physicians, and they transact clinical records for over 112 million patients. In other words, the company has become an integral part of the U.S. healthcare system.

This report aims to help investors sort through Change Healthcare’s financial filings to understand the fundamentals and valuation of this IPO.

GAAP Earnings Mislead Investors

CHNG was founded in 2017 through a joint venture between Nashville-based Change Healthcare (formerly HCIT Holdings) and the Technology Solutions segment of McKesson Corporation (MCK). CHNG is a holding company that has no assets aside from its interest in the joint venture.

At first glance, CHNG appears to…

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