Press Ganey Holdings, Inc. (NYSE:PGND) is a leading provider of patient experience and employee engagement measurement, analytics, and strategic advisory services for health care organizations. The foundation of the business is its proprietary data set, which it collects from surveys of patients, doctors, nurses, administrators, and employees. In 2015, it distributed 105 million surveys, including 33 million electronically and 72 million by mail or phone.
We believe the available market for these services exceeds $1 billion. The company is also working on exciting new products that would dramatically expand that opportunity, including a “transparency” product that will give patient derived quality assessments of doctors and hospitals. Press Ganey generates mid-30% cash flow margins now that could expand by 10% as it leverages its fixed cost base. We believe we have nice upside to our investment given high single-digit topline growth and expanding margins.
From Baron Discovery Fund's second quarter 2016 commentary.
