Evolent Health (EVH) AI Stock Analysis

• Market Cap: $1.06B
• Dividend Yield: N/A
• Average Volume (3M): 2.42M
• Price to Earnings (P/E): ―
• Beta (1Y): -0.11
• Revenue Growth: 30.09%
• EPS Growth: 36.14%
• Country: US
• Employees: 4,500
• Sector: Healthcare
• Sector Strength: 65
• Industry: Medical - Healthcare Information Services
• EPS (TTM): -0.81
• Shares Outstanding: 116,591,150
• 10 Day Avg. Volume: 2,579,611
• 30 Day Avg. Volume: 2,417,864
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.44
• Price to Cash Flow (P/CF): -10.70
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $15.80
• Price Target Upside: 73.82% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

Evolent Health's overall score is influenced by strong revenue growth but is tempered by ongoing profitability challenges and a bearish technical outlook. The earnings call provided positive guidance and contract renewals, yet highlighted significant cost pressures and a cautious 2025 outlook. The negative P/E ratio and lack of dividend yield contribute to a less attractive valuation.

Positive Factors

Contract Wins

Evolent Health has signed a Technology and Services contract expansion with a large New England health plan, indicating strong sales momentum and demand.

Customer Loyalty

Evolent Health reported 100% logo retention for its top customers, which contribute to 90% of its consolidated revenue, highlighting strong customer loyalty.

Growth Opportunities

Evolent Health represents an attractive buying opportunity, particularly given its ability to drive over 20% growth, beginning in 2026.

Negative Factors

Market Perception

Investors are likely to view the FY25 outlook negatively due to Q4 events.

Oncology Costs

Elevated cancer costs continued to negatively impact profitability.

Revenue Guidance

Evolent Health's 2025 revenue and adjusted EBITDA guidance are below previous estimates and consensus expectations.

Evolent Health Business Overview & Revenue Model

Company Description

Evolent Health (EVH) is a healthcare company that provides technology-driven solutions to healthcare providers and payers. The company focuses on helping health systems and physician organizations transition to value-based care, where the emphasis is on optimizing health outcomes and reducing costs. Evolent Health's core offerings include clinical and administrative solutions, performance improvement services, and a proprietary platform designed to enhance clinical and financial performance.

How the Company Makes Money

Evolent Health makes money primarily through service fees and performance-based arrangements with healthcare providers and payers. The company generates revenue by offering a suite of services that include consulting, technology solutions, and managed care services. Evolent Health partners with health systems and physician organizations to improve operational efficiency and patient outcomes, often entering into multi-year agreements where fees are tied to achieving specific performance targets. Additionally, Evolent's value-based care platform allows partners to transition from fee-for-service models to value-based care models, and the company may receive a share of the cost savings achieved through these initiatives. Key revenue streams include technology platform subscriptions, implementation fees, and shared savings arrangements.

Evolent Health Financial Statement Overview

Summary

Evolent Health is experiencing strong revenue growth, yet profitability remains a concern due to negative EBIT and net income margins. The balance sheet shows improved leverage, but cash flow challenges persist due to high capital expenditures.

Income Statement

Evolent Health has experienced consistent revenue growth, with a notable increase of 30% from 2022 to 2023 and 2023 to 2024. However, the company is struggling with profitability, as indicated by negative EBIT and net income margins. Despite the growing revenue, the net profit margin remains negative, which poses a challenge for future profitability.

Balance Sheet

The debt-to-equity ratio has improved over time, falling from 0.40 in 2023 to 0.22 in 2024, indicating a stronger equity position. However, the company has negative net income, impacting the return on equity. The equity ratio is relatively stable, suggesting a balanced asset structure. Continued focus on reducing liabilities relative to equity is necessary.

Cash Flow

Operating cash flow turned positive in 2024, but free cash flow remains negative due to high capital expenditures. The operating cash flow to net income ratio has improved, indicating better cash management despite persistent net losses. Free cash flow to net income remains challenging, reflecting ongoing cash utilization issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.55B	1.96B	1.35B	907.96M	1.02B
	Gross Profit
367.35M	460.47M	316.58M	250.41M	321.06M
	EBIT
-40.48M	-71.21M	-59.84M	30.25M	-37.88M
	EBITDA
80.06M	-24.79M	43.75M	55.66M	-241.38M
	Net Income Common Stockholders
-61.62M	-113.04M	-18.70M	-30.28M	-334.25M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
163.50M	192.82M	188.20M	266.28M	340.49M
	Total Assets
2.54B	2.68B	1.82B	1.42B	1.37B
	Total Debt
223.15M	644.80M	476.12M	280.47M	359.78M
	Net Debt
118.95M	451.97M	287.92M	14.19M	19.29M
	Total Liabilities
1.54B	1.61B	957.88M	725.83M	750.59M
	Stockholders Equity
1.00B	1.07B	859.42M	693.63M	619.60M
Cash Flow		Free Cash Flow
-6.13M	113.84M	-49.91M	13.76M	-45.70M
	Operating Cash Flow
18.77M	142.58M	-11.55M	38.75M	-16.23M
	Investing Cash Flow
-62.93M	-415.54M	-259.12M	-15.79M	261.07M
	Financing Cash Flow
-565.00K	281.34M	131.54M	-29.55M	-11.86M

Evolent Health Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 9.09
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVH, the sentiment is Negative. The current price of 9.09 is below the 20-day moving average (MA) of 9.49, below the 50-day MA of 9.57, and below the 200-day MA of 17.22, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 44.65 is Neutral, neither overbought nor oversold. The STOCH value of 29.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EVH.

Evolent Health Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CERT	76 Outperform	$2.33B	―	-1.14%	―	8.70%	78.31%
OMCL	61 Neutral	$1.46B	118.99	1.03%	―	-3.04%	―
PHR	58 Neutral	$1.40B	―	-22.67%	―	17.83%	59.64%
Sector *	51 Neutral	$5.31B	3.33	-39.82%	2.92%	17.95%	1.84%
EVH	51 Neutral	$1.06B	―	-5.96%	―	30.09%	36.14%
TDOC	39 Underperform	$1.27B	―	-52.46%	―	-1.26%	-338.56%

Evolent Health Corporate Events

Evolent Health Nominates Shawn Guertin to Board

On April 16, 2025, Diane Holder announced she would not seek re-election to Evolent Health‘s Board of Directors at the upcoming annual meeting on June 5, 2025. Her decision was not due to any disagreement with the company. In response, the Board has nominated Shawn Guertin, a seasoned executive with extensive experience in the healthcare industry, to stand for election. Guertin’s nomination aligns with Evolent’s ongoing efforts to refresh its board with independent directors, aiming to enhance corporate governance and drive shareholder value.

Spark’s Take on EVH Stock

According to Spark, TipRanks’ AI Analyst, EVH is a Neutral.

Evolent Health shows significant revenue growth but faces challenges with profitability and cash flow, reflected in its financial performance score. Technical indicators suggest bearish momentum. Valuation metrics indicate the need for improved profitability. Despite strong contract renewals, the earnings call highlights cost pressures. Overall, the stock is positioned for potential growth, but with notable risks.

To see Spark’s full report on EVH stock, click here.

Evolent Health Strengthens Board with Strategic Changes

On February 3, 2025, Evolent Health entered into a Cooperation Agreement with Engaged Capital, resulting in the appointment of Brendan Springstubb to its Board of Directors. Additionally, M. Bridget Duffy resigned from the Board, not due to any disagreements. These changes are part of Evolent’s ongoing corporate governance enhancement efforts, highlighted by the upcoming appointment of Richard Jelinek as Chair of the Board at the 2025 Annual Meeting and the search for a new independent director. The agreement with Engaged Capital includes standstill restrictions and stipulations regarding voting and nominations, aimed at ensuring strong shareholder collaboration and enhancing Evolent’s competitive position in the healthcare industry.