Earnings call transcript: Rede D’Or misses Q3 2026 estimates but stock rises

Rede D’Or reported third-quarter 2026 results that fell short of Wall Street expectations on both earnings and revenue, yet the stock rose 3.07% in after-hours trading. Investors focused on stronger operating trends across hospitals, oncology, and health insurance. Adjusted earnings per share amounted to $0.59, below the $0.6007 forecast, while revenue was $15.52 billion, missing the $16.19 billion estimate.

Despite the shortfall, management highlighted margin gains, cash generation, and expansion plans. Hospital revenue increased 10.1% year-over-year, and adjusted EBITDA margins improved. SulAmérica's consolidated loss ratio dropped to 77%, aiding insurance profitability. Oncology revenue grew 18% year-over-year, reflecting continued growth in higher-complexity care.

The company plans to invest in expansion, technology, and selective acquisitions despite a tougher economic environment. Rede D’Or's stock trades at a P/E ratio of 14.9 and a PEG ratio of 0.87, suggesting it is attractively priced relative to near-term earnings growth. The company's financial position is strong, with a current ratio of 2.91 and a good overall financial health score.

The stock's valuation places it among the most undervalued on the market. Despite the earnings miss and revenue shortfall, the company's operating data indicated healthy core business trends. Hospital revenue grew at a double-digit rate, and insurance profitability strengthened. Management reiterated its commitment to growth, including selective acquisitions and share repurchases, while keeping leverage under control.