Tech-based primary care vendor Oak Street raked in $297 million in revenues during the first quarter of the year—a 47% annual jump from $197 million in Q1 2020. The primary care disruptor plans to see stronger growth this year as it opens up 42 new clinics by the end of 2021.
When analysts asked Oak Street execs about the company’s M&A strategy during the earnings call, they indicated it’s not focused on securing large deals. Oak Street’s earnings statement revealed a $1 million acquisition, which leadership clarified was an acquisition of a smaller healthcare practice. CEO Mike Pykosz indicated there could be more smaller deals like it on the horizon as Oak Street expands, but bigger M&As aren’t a “core part” of the company’s strategy.
It seems more likely its tie-up with Walmart will become more important, and even expand this year. Last year, Oak Street teamed up with Walmart to bring its primary care clinics to three Walmart supercenters in Texas. During Oak Street’s Q1 2021 call, execs said that the company “likes its partnership with Walmart,” and they’re “encouraged by the results so far.” With a positive outlook, we could see Oak Street expand to Walmart supercenters beyond Texas: Oak Street already plans to widen its footprint in Georgia this summer—a state where Walmart has 150 supercenters where it could offer Oak Street’s services.
We expect to see more rosy earning results from Oak Street and its peers throughout the rest of the year—here’s why: