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Ebix 1Q20 schedule and India health notes ?3

15:51 06-May-20


Ebix has scheduled its first quarter report for the morning of May 11th.  The two analyst estimates are for 86.5+/-7.5 cents of EPS from $153M in revenue, remaining flat this quarter.  That last part is where the trouble lies in my mind. 

Even official COVID-19 cases are accelerating as India attempts to ease lock downs and the country is under external as well as internal economic stress.  Furthermore, I see little hope in the idea that early casualties would bring about a sharper rebound.  As discussed here, 60-70% of the population is required for herd immunity, and this article from John Hopkins staff spells out the danger of pursuing that route in a foolhardy manner.  The article is U.S.-centric and JHU is affiliated with Bloomberg.  That gives it a negative economic bias, but the basic math is still on point.  Though I still think there is reason to believe in undocumented cases, progress would accrue more to developed areas with international travel and advanced healthcare systems.  If the rate of serious complications for 1 in 5 cases holds, I calculate that would mean around 150M dead in India on the path the herd immunity.  Currently India reports 1768 deaths from 52,559 cases according to JHU. 

Thus, I will comment on the Ebix report, but am inclined to remain skeptical of any more euphemistic management projections.  The national situation may at least lead it to open up more, but I doubt that would help Ebix.  The company's debt situation isn't dire yet, but the situation on the ground may become so.  Management has gone mercifully silent as of late, unlike Vuzix, and whether or not Ebix decides to abort the Yatra acquisition will be a key point of interest.  Fortunately, neither the 6-K nor the 8-K specifies any termination fee for Ebix in such an event.

Elsewhere in healthcare, Fitbit has launched an AFib study.  This is exactly the sort of thing that will interest Google, but I see it as immaterial to the current stock price.  Instead the market will be focused on jobs, where losses have multiplied roughly ten-fold over last month according to ADP.  However, with lock downs easing, it is prepared to completely shrug off anything lower than 20% headline unemployment on Friday morning.  We'll see what happens from there.