TD Cowen analyst Charles Rhyee maintained a Buy rating on Evolent Health today and set a price target of $8.00.
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Charles Rhyee has given his Buy rating due to a combination of factors that suggest the current valuation of Evolent Health’s stock is overly pessimistic. Despite the significant drop in share prices, largely attributed to concerns over the potential expiration of HIX subsidies and the company’s leverage, Rhyee believes these fears have been exaggerated and do not align with the company’s fundamentals.
Rhyee points out that even in a worst-case scenario, where HIX membership declines significantly, the company’s business remains strong, capable of achieving substantial growth. Management’s expectations for adjusted EBITDA to remain stable or slightly increase from the 2025 baseline further support this view. Additionally, while acknowledging the leverage concerns, Rhyee notes there are no immediate risks related to covenants or repayments, with improvements in free cash flow conversion anticipated. Overall, the current trading price of Evolent Health is seen as reflecting a worst-case scenario, making it an attractive buy opportunity.
According to TipRanks, Rhyee is a 3-star analyst with an average return of 2.6% and a 50.10% success rate. Rhyee covers the Healthcare sector, focusing on stocks such as IQVIA Holdings, Evolent Health, and BrightSpring Health Services, Inc..
In another report released on November 14, Canaccord Genuity also maintained a Buy rating on the stock with a $9.00 price target.