Privia Health Group (PRVA) has received a new Buy rating, initiated by BMO Capital analyst, .
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BMO Capital’s rating is based on Privia Health Group’s strong potential for long-term earnings growth and its effective approach to value-based care (VBC). The company is seen as a stable earnings compounder with impressive free cash flow conversion, offering a less volatile method for investors to gain exposure to VBC. This stability is attributed to its highly recurring revenue and significant expansion opportunities, which support a projected 20%+ EBITDA growth over the next two years.
BMO Capital also highlights Privia’s differentiated approach to risk management in VBC. Unlike its peers, Privia only assumes risk in areas it can control and shares this risk with payers and providers, ensuring better alignment and consistent revenue streams. This strategy is expected to drive margin expansion and profitability for both Privia and its provider partners. Additionally, Privia’s ability to negotiate better reimbursement rates and enhance practice economics through its tech-driven platform further solidifies its value proposition, justifying a premium valuation relative to its slower-growing peers.
In another report released yesterday, Canaccord Genuity also reiterated a Buy rating on the stock with a $34.00 price target.