Kirby McInerney LLP Urges Investors in ModivCare, Inc. (MODV) to Inquire About Their Rights in Class Action Lawsuit

NEW YORK--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the District of Colorado on behalf of those who acquired ModivCare, Inc. (“ModivCare” or the “Company”) (NASDAQ:MODV) securities from November 3, 2022, through September 15(“the Class Period”). Investors have until March 31, 2025, to apply to the Court to be appointed as lead plaintiff in the lawsuit.

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On May 4, 2023, before market hours, ModivCare issued a press release reporting its financial results for first quarter 2023. During the associated earnings call on the same day, CFO Kenneth Shepherd revealed the Company experienced a reduction of cash flow during the quarter. On this news, the price of ModivCare shares declined by $11.30 per share, or approximately 16%, from $69.30 per share on May 3, 2023, to close at $58 on May 4, 2023.

On August 3, 2023, after market hours, ModivCare issued a press release reporting its financial results for second quarter 2023. During the associated earnings call on the same day, CEO Heath Sampson informed investors the Company experienced the expansion of a “large payable balance” that impacted the Company’s cash flow from operations during the quarter. On this news, the price of ModivCare shares declined by $2.86, from $38.24 per share on August 4, 2023.

Then, on February 23, 2024, before market hours, ModivCare issued a press release reporting its financial results for fourth quarter 2023. During the associated earnings call, Sampson informed investors that the Company had suffered negative cash flow during the quarter and expected the trend to continue for the first half of fiscal year 2024. On this news, the price of ModivCare shares declined by $17.25, or nearly 39%, from $43.87 per share on February 22, 2024, to close at $26.62 per share on February 23, 2024.

Thereafter, on September 12, 2024, before market hours, the Company issued a press release reporting, among other things, that it would “undertake actions to seek additional capital, including filing a shelf registration statement” with the SEC to improve its liquidity. On this news, the price of ModivCare shares declined by $18.43, or approximately 59%, from $31.19 per share on September 11, 2024, to close at $12.76 per share on September 12, 2024.

Finally, on September 16, 2024, before market hours, ModivCare issued a press released titled “ModivCare Provides Financial Update.” Therein, the Company revised its 2024 Adjusted EBITDA guidance range from $185-$195 million to $170-$180 million, “primarily due to [non-emergency medical transportation] NEMT segment pricing accommodations made to strategically retain and expand key customer relationships.” On this news, the price of ModivCare shares declined by $1.40, from $14.12 per share on September 15, 2024, to close at $12.72 per share on September 16, 2024.

The complaint alleges that defendants, throughout the Class Period, failed to disclose that certain contracts used in ModivCare’s NEMT segment caused the Company’s free cash flow to deteriorate and that, as a result, (1) contract renegotiations and pricing accommodations negatively impacted the Company’s adjusted EBITDA; and (2) the Company had insufficient liquidity.

If you purchased or otherwise acquired ModivCare securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at [e-mail], or fill out the form below, to discuss your rights or interests with respect to these matters without any cost to you.

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Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.

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