Analyst Bill Sutherland of Benchmark Co. reiterated a Buy rating on Agilon Health (AGL – Research Report), with a price target of $4.00.
Bill Sutherland has given his Buy rating due to a combination of factors that highlight Agilon Health’s strategic positioning and financial outlook. The company’s cautious approach in FY25, including exiting unprofitable partnerships and renegotiating payor contracts, is expected to improve its financial performance. Additionally, Agilon Health’s guidance indicates a significant improvement in cash reserves, with an expected $330 million by year-end, surpassing previous expectations by $75 million.
Furthermore, the company has demonstrated strong revenue growth and effective cost management, as seen in the 4Q24 results where revenue increased by 44% year-over-year while general and administrative expenses decreased. Despite a projected decline in membership, the improved payor contracts and a favorable risk adjustment are anticipated to enhance the medical margin. These strategic moves, along with the potential for positive AEBITDA in the future, underpin Sutherland’s confidence in Agilon Health’s stock, justifying the Buy rating.
Sutherland covers the Healthcare sector, focusing on stocks such as Healthcare Services, AMN Healthcare Services, and Cross Country Healthcare. According to TipRanks, Sutherland has an average return of -4.6% and a 38.34% success rate on recommended stocks.
In another report released on February 25, Wells Fargo also maintained a Buy rating on the stock with a $5.00 price target.