RadNet, Inc. (RDNT): A Bear Case Theory 

We came across a bearish thesis on RadNet, Inc. on Hunterbrook’s Substack. In this article, we will summarize the bulls’ thesis on RDNT. RadNet, Inc.’s share was trading at $71.22 as of December 16th. RDNT’s trailing P/E was 386.89 according to Yahoo Finance.

RadNet, Inc., together with its subsidiaries, provides outpatient diagnostic imaging services in the United States and internationally. RDNT presents a cautionary tale for investors chasing the AI narrative, as its core business and newly rebranded Digital Health segment reveal significant misalignment between hype and reality.

Less than 5% of the company’s revenue, roughly $65 million out of $1.5 billion in the first nine months of 2025, comes from Digital Health, with much of that growth stemming from intercompany sales to RadNet’s own imaging centers. While the company markets AI-powered tools like Enhanced Breast Cancer Detection and DeepHealthOS as transformative, external adoption has been minimal, with only one notable outside customer and limited traction among corporate clients.

Revenue growth metrics are further clouded by consolidations of neighboring centers, inflating same-center sales from an estimated 2.5%–3% organically to 6%–10% reported, masking underlying stagnation. Inconsistencies in filings, including conflicting counts of operational centers and divergent revenue figures, underscore chaotic bookkeeping and opaque reporting practices. Adjusted EBITDA margins, which exclude stock-based compensation and certain R&D expenses, suggest profitability improvements, yet corrected figures reveal margins are actually contracting, highlighting the fragility of the business’s financial health.

Insider selling, totaling over 780,000 shares worth $50.9 million in the past two years, reinforces concerns that those closest to the company are monetizing the stock’s AI-fueled surge. Meanwhile, the underlying imaging center business faces persistent reimbursement pressure from Medicare and commercial payers, limiting sustainable growth. Despite investor enthusiasm for AI-driven disruption, RadNet’s core fundamentals and external adoption of its Digital Health tools indicate that the stock is trading well above intrinsic value, creating a high-risk scenario where the current valuation is largely dependent on hype rather than operational execution or durable revenue streams.

Previously we covered a bullish thesis on Tenet Healthcare Corporation (THC) by BlackSwanInvestor in December 2024, which highlighted the company’s efficient Ambulatory Care segment, strong cash flow, debt reduction, and undervaluation. The company’s stock price has appreciated approximately by 56.62% since our coverage. The thesis still stands as Tenet’s Ambulatory Care continues to drive value. Hunterbrook takes a contrarian view, emphasizing RadNet’s overstated AI growth, opaque reporting, and overvalued stock.

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Disclosure: None.