SAN DIEGO, Feb. 14, 2025 (GLOBE NEWSWIRE) -- A class action lawsuit has been filed on behalf of all persons and entities who purchased or otherwise acquired ModivCare, Inc. (NASDAQ: MODV) (“ModivCare” or the “Company”) securities between November 3, 2022 and September 15, 2024 (the “Class Period”), charging the Company and certain senior executives with violations of the federal securities laws (collectively, “Defendants”).

ModivCare investors have until March 31, 2025 to seek appointment as lead plaintiff of the ModivCare class action lawsuit.

If you purchased or acquired ModivCare securities between November 3, 2022 and September 15, 2024, and suffered substantial losses, and you wish to obtain additional information or serve as lead plaintiff in this lawsuit, you may submit your information and contact us here: https://dicellolevitt.com/securities/modivcare/.

You can also contact DiCello Levitt attorneys Brian O’Mara or Ruben Peña by calling (888) 287-9005 or emailing investors@dicellolevitt.com. Those who inquire by email are encouraged to include their mailing address, telephone number, and the number of shares purchased.

No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice.

Case Allegations

ModivCare provides a suite of integrated supportive care solutions for public and private payors and their members. Through its non-emergency medical transportation (“NEMT”) segment, ModivCare provides transportation services for which it receives payment from third-party payors, including Medicaid agencies and managed care organizations (“MCO”).

The ModivCare lawsuit alleges that Defendants issued positive statements about the Company’s business, operations, and prospects that were materially misleading and/or lacked a reasonable basis during the Class Period. Specifically, Defendants 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, (i) contract renegotiations and pricing accommodations negatively impacted the Company’s adjusted EBITDA; and (ii) the Company had insufficient liquidity.

The truth began to emerge on May 4, 2023, when ModivCare announced its first quarter 2023 financial results, revealing the Company experienced a reduction of cash flow from operations during the quarter. On this news, the price of ModivCare stock fell by $11.30, or approximately 16%, to close at $58 per share on May 4, 2023.

On August 3, 2023, during an earnings call, Defendants addressed the Company’s cash flow from operations for the second quarter of 2023, disclosing that ModivCare “experienced a temporary timing mismatch between payments and collections, which created a large payable balance that [it had] been reducing over the past year.” On this news, the price of ModivCare stock fell by $2.86, or approximately 7%, to close at $35.38 per share on August 4, 2023.

Then, on February 23, 2024, during an earnings call, Defendants announced that the Company’s cash flow for its fourth quarter 2024 was negative $37 million “due to delay in payment from an MCO client” and that they “anticipate[d] [ModivCare’s] free cash flow for the first half of the year will be constrained.” On this news, the price of ModivCare stock fell by $17.25, or approximately 39%, to close at $26.62 per share on February 23, 2024.

On September 12, 2024, ModivCare issued a press release, reporting that it would “undertak[e] actions to seek additional capital, including filing a shelf registration statement” with the U.S. Securities and Exchange Commission to improve its liquidity. On this news, the price of ModivCare stock fell by $18.43, or approximately 59%, to close at $12.76 per share on September 12, 2024.

The truth was fully revealed on September 16, 2024, when ModivCare announced it was revising its 2024 adjusted EBITDA guidance range from $185–$195 million to $170–$180 million, “primarily due to NEMT segment pricing accommodations made to strategically retain and expand key customer relationships.” On this news, the price of ModivCare stock fell by $1.40, or approximately 10%, to close at $12.72 per share on September 16, 2024.

About DiCello Levitt

At DiCello Levitt, we are dedicated to achieving justice for our clients through class action, business-to-business, public client, whistleblower, personal injury, civil and human rights, and mass tort litigation. Our lawyers are highly respected for their ability to litigate and win cases – whether by trial, settlement, or otherwise – for people who have suffered harm, global corporations that have sustained significant economic losses, and public clients seeking to protect their citizens’ rights and interests. Every day, we put our reputations – and our capital – on the line for our clients.

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