Thesis
HMS Holdings (HMSY) shares tanked nearly 20% after reporting disappointing Q3-19 revenue figures and issuing reduced revenue guidance for the year.
The main problem was with the company's Coordination of Benefits (COB) business, which comprises 70% of company revenue. Sales fell 10%. The shortfall was due to two issues, notably the lumpiness of COB revenue generation and a tough comp to Q3-18, when COB revenue was up 17%.
I think the selloff is an overreaction, which has been common to both the upside and downside in recent HMS quarters. With shares off