Richard Close, an analyst from Canaccord Genuity, maintained the Buy rating on Evolent Health (EVH – Research Report). The associated price target remains the same with $16.00.
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Richard Close has given his Buy rating due to a combination of factors that suggest a positive long-term outlook for Evolent Health. Despite shares having declined significantly after the third quarter, the fourth-quarter report and the initial guidance for 2025 seem adequate for investors with a long-term perspective. Close believes that the guidance for 2025 sets a realistic baseline, helping rebuild investor confidence after a challenging 2024 marked by high medical costs, particularly in oncology. The company is also expected to achieve 20%+ annual EBITDA growth beyond the ‘reset’ year of 2025, with a lower risk profile and improved visibility.
While there are uncertainties such as potential changes in Medicaid policy, Evolent Health’s diversified business model, with a significant portion in Medicaid, offers stability. The company’s management has expressed confidence in revenue growth, and the adjusted EBITDA range accounts for potential variances in oncology costs, providing room for positive revisions throughout 2025. Additionally, the strength of the company’s pipeline, including Performance Suite under new risk corridors, supports Close’s optimistic view that the stock has the potential to appreciate.
In another report released today, BTIG also maintained a Buy rating on the stock with a $20.00 price target.
EVH’s price has also changed dramatically for the past six months – from $27.950 to $10.710, which is a -61.68% drop .