In a report released today, Matthew Shea from Needham reiterated a Buy rating on Evolent Health, with a price target of $15.00.
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Matthew Shea’s rating is based on Evolent Health’s strong third-quarter performance, which exceeded expectations despite concerns about cost pressures from the Health Insurance Exchange (HIX). The management’s decision to only slightly adjust the EBITDA range reflects a cautious approach, yet the guidance anticipates an increase in HIX costs that has not yet materialized.
Looking ahead to fiscal year 2026, the company has reaffirmed its revenue target of over $2.5 billion, with potential for upside if there are no significant changes in membership. The enhancements in risk contracts expected next year should lead to more predictable EBITDA, providing greater visibility and positioning Evolent Health as a near Rule of 30 company. This potential re-rating of the company’s valuation underpins the Buy recommendation.
Shea covers the Healthcare sector, focusing on stocks such as Evolent Health, Privia Health Group, and Agilon Health. According to TipRanks, Shea has an average return of -12.6% and a 44.44% success rate on recommended stocks.