ModivCare Under Fire: Class Action Lawsuit Filed for Recent Financial Missteps

The Law Offices of Frank R. Cruz have filed a class action lawsuit on behalf of investors who purchased ModivCare, Inc. (“ModivCare” or the “Company”) MODV securities from November 3, 2022 to September 15, 2024 (the “Class Period”). Investors must file a lead plaintiff motion by March 31, 2025.

IF YOU SUFFERED A LOSS ON YOUR MODIVCARE INVESTMENTS, CLICK HERE TO SUBMIT A CLAIM TO POTENTIALLY RECOVER YOUR LOSSES IN THE ONGOING SECURITIES FRAUD LAWSUIT.

For further assistance regarding your legal rights, contact the Law Offices of Frank R. Cruz via email at [email protected] or call (310) 914-5007. You can also visit our website at www.frankcruzlaw.com.

Overview of Events

On May 4, 2023, ModivCare reported its first-quarter results for 2023, revealing a decline in cash flow from operations. This announcement triggered a $11.30 drop in stock price, a decrease of 16.3%, closing at $58.00 per share. This sudden change was a cause for concern among investors.

Later, on August 3, 2023, ModivCare disclosed its second-quarter financials, indicating a larger payable balance affecting its cash flow. Following this news, the stock price declined further, falling by $2.86 or 7.5%, to a close of $35.38 per share on August 4, 2023.

On February 23, 2024, investors were alarmed again when ModivCare’s fourth-quarter results revealed negative cash flow for the quarter. The company anticipated this trend would persist into the first half of fiscal 2024, causing its stock to plummet by $17.25 or 39.3%, settling at $26.62 per share.

Things worsened on September 12, 2024, when ModivCare announced it would pursue additional capital through a shelf registration statement with the SEC to bolster liquidity. This revelation resulted in a staggering $18.43 drop, or 59.1%, in stock price, bringing it down to $12.76 per share.

Finally, on September 16, 2024, ModivCare revised its 2024 Adjusted EBITDA guidance from a range of $185–$195 million to $170–$180 million. This adjustment followed pricing accommodations intended to maintain key customer relationships. Consequently, the stock fell another $1.40, or 9.9%, closing at $12.72 per share.

details of the Lawsuit

The lawsuit claims that throughout the Class Period, Defendants made significant false and misleading statements while failing to disclose crucial adverse facts regarding ModivCare’s operations and prospects. Investors were allegedly not informed that: (1) certain contracts impacted free cash flow negatively; (2) contract renegotiations hurt adjusted EBITDA; (3) the company faced liquidity issues; and (4) positive statements made by Defendants were misleading and lacked a reasonable basis.

Next Steps for Investors

If you purchased or acquired ModivCare securities during the Class Period, you may request to be appointed as lead plaintiff in this case by moving the Court no later than March 31, 2025.

Contact Us for More Information:

To learn more about this lawsuit or for any questions regarding your rights, please reach out to:

Law Offices of Frank R. Cruz

212 Avenue of the Stars, Suite 800

Telephone: 310-914-5007

Email: [email protected]

Visit our website at: www.frankcruzlaw.com

This press release may be regarded as Attorney Advertising in some jurisdictions under applicable laws and ethical guidelines.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250204544070/en/

Law Offices of Frank R. Cruz

212 Avenue of the Stars, Suite 800

Telephone: 310-914-5007

Email: [email protected]

Visit our website at: www.frankcruzlaw.com