What Happened?
Shares of diagnostic imaging company RadNet (NASDAQ: RDNT) fell 4% in the afternoon session after short-seller Hunterbrook Capital released a critical report questioning the medical imaging company's artificial intelligence (AI) business and growth metrics.
The report claimed that RadNet's AI division, a key driver of investor enthusiasm, accounted for less than 5% of the company's revenue. Hunterbrook's analysis also challenged RadNet's reported "same-center" revenue growth, suggesting that about half of this growth resulted from closing centers near surviving locations and shifting patients, rather than organic expansion. This method, according to the report, lowered the real growth to an estimated 2.5%-3%, well below the reported 6%-10%.
Additionally, the short-seller raised concerns about the company's accounting practices, noting that its adjusted margins excluded costs like stock-based compensation and some research and development spending.
The shares closed the day at $71.24, down 1.9% from previous close.
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What Is The Market Telling Us
RadNet’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock dropped 2.9% on the news that the company filed a prospectus supplement to register the potential resale of up to 73,567 shares of its common stock by certain selling stockholders.
The filing with the Securities and Exchange Commission was made under a shelf registration statement, which a company maintains for flexibility. News of existing shareholders registering to sell their shares often worries the market. This is because it could increase the supply of stock available for purchase, which can put downward pressure on the price. Investors also sometimes interpret such sales as a potential lack of confidence from those with intimate knowledge of the company.
RadNet is up 1.5% since the beginning of the year, but at $71.24 per share, it is still trading 15.7% below its 52-week high of $84.48 from November 2025. Investors who bought $1,000 worth of RadNet’s shares 5 years ago would now be looking at an investment worth $3,846.
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