Small-cap healthcare operator Matria Healthcare (MATR) has received a Buy recommendation recently from Zacks senior healthcare industry analyst Chris Kallos.  We looked into his latest report on the company for details:

'Matria Healthcare currently operates two distinct business segments: Health Enhancement and Women's and Children's Health (WCH). MATR recently announced it had been awarded two new health enhancement accounts, and that two of the company's existing accounts have expanded the Matria programs and services provided to their employees. When services are fully implemented, the estimated aggregate annualized value of the new and expanded awards totals approximately $9.1M.

'The company anticipates the new agreements to commence in 1Q08. We maintain a Buy recommendation at current levels, pending the release of 3Q07 financial results.

'We have valued Matria on a forward price/earnings (P/E) basis, as well as through a comparison of similar firms in the disease management (DM) sector. We believe the long-term nature of chronic care management and related contracts will stabilize quarterly earnings and improve investor confidence in the stock. P/E multiples applied to DM pure plays are currently in the order of 35x the consensus fiscal year 2006 EPS. Our $30 price target is derived using a P/E multiple of 20.7x our FY08 EPS of $1.45.'