Healthcare cost management firm Evolent Health (EVH) beat earnings views and raised its full-year guidance on Tuesday. The stock, which had posted gains late in the day, rose during extended trading hours.
Evolutionary Health Gains
evaluations: FactSet analysts forecast EVH to earn 5 cents per share, a 350% jump from a loss of 2 cents a year earlier. Revenue was expected to grow 35%, from $222 million in the first quarter of 2021, to $299 million in the second quarter of 2022.
Results: Revenue rose 44% to 320 million, the best profit in years and the third consecutive quarter of accelerated growth. EVH reported that earnings per share rose 600% to 10 cents in the second quarter.
Outlook: Evolent Health expects third-quarter revenue between $343 million-$363 million. Adjusted EBITDA is projected to be in the range of $24 million to $29 million. The company expects full-year sales to be $1.32 billion to $1.36 billion, down from a previous forecast of $1.16 billion to $1.21 billion.
“Our financials reflect a growing number of successful partnerships with our payer and provider customers, as well as deeper and broader relationships in our solutions,” CEO Seth Blackley said in a press release.
Blackley also confirmed that EVH had on Monday closed the acquisition of IPG, a provider of surgical management technology for musculoskeletal conditions, from the asset manager TPG (TPG).
EVH stock gained 1.15% to 35.19 at Tuesday’s close trading in the market, recovering from a low start. Evolent stock finished just outside the buy range. Shares were up 5% after the market closed.
Evolent Health’s stock exploded last July 7 buy points of 32.64 and 33.24 in heavy volume. But shares fell about 6% on July 11 and 12, quickly falling more than 8% below both entries and hitting automatic 7%-8% sell signal. EVH stock has rebounded strongly from the 50-day line. Investors can use 33.24 as a legitimate buy point.
Evolent Health’s revenue rose 38% in the first quarter to $297 million. EPS swung to a profit of 12 cents from a loss of 1 cent a year earlier, after jumping 167% to 8 cents in the fourth quarter of 2021.
EVH stock has the best possible Composite assessment of 99. Meanwhile, it has a relative strength rating of 97, an exclusive IBD Stock Control stock price movement gauge with a score of 1 to 99, with 99 tops. The rating shows how a stock’s performance over the past 52 weeks stacks up against all other stocks in the IBD database. The EPS estimate is 77.
Evolent Health and Medical Stocks
Arlington, Va.-based EVH. helps healthcare providers and payers control costs and financial risks. Evolent Health works with Medicaid, Medicare and private health plans. The company reports that its programs support more than 3 million patients in the US across all lines of business.
Analysts are predicting booming growth for the healthcare software and administrative services provider, as many healthcare-related companies remain relatively insulated from recessionary risks and downward market trends.
Medical stocks continue to hold up well during the market’s uptrend. Dow Jones stocks United Health (UNH) along with the health insurance giant Humana (HUM) and CVS Health (CVS) are all showing signs of strength in the current market.
With labor costs rising and people using healthcare services more as the Covid pandemic fades, controlling medical costs is becoming a crucial business. Evolent already has agreements with Blue Cross Blue Shield of North Carolina, Florida-based AvMed and Molina Healthcare (MH).
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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