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Investing.com - Truist Securities has reaffirmed its Buy rating and $14.00 price target on Evolent Health (NYSE:EVH), following recent updates from two key customers that represent significant portions of the company’s revenue. According to InvestingPro data, analysts maintain a Strong Buy consensus on the $1.36 billion healthcare technology company, with price targets ranging from $9 to $20.
The reaffirmation comes after Centene (NYSE:CNC) and Molina Healthcare (NYSE:MOH) released statements on July 1 and July 7, respectively, regarding rising cost trends in government-sponsored healthcare programs. Centene, which accounts for approximately 11% of Evolent’s revenues, highlighted concerns about high-cost drugs, while Molina, representing about 21% of revenues, noted broad-based trend increases. Despite these challenges, Evolent has maintained robust revenue growth of 10.24% over the last twelve months.
Truist Securities indicated that these customer updates provide important data points regarding cost trends across government-sponsored programs, with implications for Evolent’s visibility into client performance, risk-bearing partner exposure, and downstream growth potential.
Despite these industry cost pressures, Evolent recently reaffirmed its Q2 guidance and is reportedly tracking in the upper half of that guidance range. The company has adopted a more conservative approach to cost trends this year in response to current market volatility. InvestingPro analysis suggests the stock is currently undervalued, though investors should note that the company is not yet profitable over the last twelve months. Get access to 8 more exclusive InvestingPro Tips and comprehensive financial analysis through the Pro Research Report.
Truist Securities noted that while these updates create some uncertainty around Evolent’s Performance Suite business, they also potentially enhance the strategic value of the company’s platform in helping managed care organizations address rising healthcare costs. The stock has shown strong momentum recently, with InvestingPro data indicating positive returns over both the last month and quarter.
In other recent news, Evolent Health reported its first-quarter 2025 financial results, revealing a revenue of $483.6 million, which exceeded expectations of $460.58 million. However, the company’s earnings per share (EPS) came in at $0.06, falling short of the forecasted $0.08. Evolent Health maintained its second-quarter and full-year 2025 Adjusted EBITDA guidance, citing favorable oncology cost trends. The company also announced a financing commitment from Ares Management (NYSE:ARES), addressing concerns about its convertible notes maturing in October 2023. UBS and Canaccord Genuity have both reiterated their Buy ratings on Evolent Health, with price targets of $15.00 and $16.00, respectively. JMP Securities continues to rate the stock as Market Outperform, with a price target of $13.00, noting the company’s stronger contracting mechanisms and growing business pipeline. Evolent Health has also secured financing to maintain a healthy cash position and execute new business wins. The company is optimistic about its future revenue, projecting between $2.06 billion and $2.11 billion for 2025.
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