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On Friday, JMP Securities analyst Constantine Davides increased the price target for Privia Health Group Inc (NASDAQ: PRVA) to $29, up from the previous target of $26, while maintaining a Market Outperform rating on the company’s shares. The stock, currently trading at $25.46, has shown remarkable momentum with a 30.23% gain year-to-date and is approaching its 52-week high of $26.04. According to InvestingPro analysis, the company appears to be trading above its Fair Value. The adjustment follows Privia Health’s release of its initial guidance for the year 2025, which includes projections for Practice Collections and adjusted EBITDA that are in line with consensus estimates.
Privia Health has forecasted Practice Collections to reach between $3.15 billion and $3.25 billion, representing a 7.8% year-over-year increase at the midpoint, which closely brackets the consensus of $3.23 billion. The company has also set its adjusted EBITDA guidance at $105 million to $110 million, indicating a 19% year-over-year increase at the midpoint, again bracketing the consensus of $106.5 million.
The company anticipates an expansion in adjusted EBITDA as a percentage of Care Margin by 200 basis points in 2025, following a 229 basis points increase in 2024. Additionally, the number of providers and attributed lives are expected to grow by 11% and 7.5% respectively at the midpoint of the guidance. With a current market capitalization of $3.06 billion, InvestingPro data reveals that Privia Health maintains strong financial health with a GREAT overall score of 3.45, despite its relatively modest gross profit margin of 10.19%.
Davides has also revised his own estimates, raising the 2025 Practice Collections estimate to $3.21 billion, up from $3.18 billion, which is an 8% increase year-over-year. The 2025 adjusted EBITDA estimate was also increased to $106.4 million from $105.4 million, marking a 15% year-over-year rise. The new price target of $29 is derived by applying a 29x multiple against the 2025 EBITDA estimate, which is an increase from the previously applied ~26x multiple. Historically, Privia Health’s shares have been traded between 17x and 39x forward adjusted EBITDA, averaging at 25x over the past two years.
JMP Securities remains optimistic about Privia Health’s future, citing its capital-efficient operating model, diversified platform across payors, providers, geographies, and risk levels, and lower profit volatility compared to others in the value-based care space. InvestingPro subscribers have access to 12 additional key insights about PRVA, including detailed valuation metrics and growth indicators. For comprehensive analysis, check out the Pro Research Report, which provides deep-dive analysis of this healthcare innovator along with 1,400+ other top US stocks. The firm also recognizes the validation of Privia Health’s approach by other value-based care entities that are adopting a more measured philosophy toward risk, along with Privia’s consistent execution.
In other recent news, Privia Health Group Inc. reported impressive fourth-quarter earnings, with adjusted earnings per share reaching $0.21, significantly exceeding the analyst consensus estimate of $0.05. The company also posted revenue of $460.9 million, surpassing expectations of $420.94 million. For the full year 2024, Privia Health’s revenue increased by 4.7% to $1.74 billion, while adjusted EBITDA grew by 25.2% to $90.5 million. Looking ahead, the company has provided 2025 revenue guidance of $1.8-1.9 billion and expects implemented providers to grow by 8.6-10.7%.
Analysts have responded positively to Privia Health’s performance, with Piper Sandler raising the stock target to $40, maintaining an Overweight rating, and noting the company’s strategic approach to value-based care and stable growth. TD Cowen increased the stock’s price target to $30, highlighting a 10% increase in GAAP revenues and a 7% rise in adjusted EBITDA for the fourth quarter of 2024. Citi also raised its price target to $32, citing a significant 44% year-over-year increase in adjusted EBITDA and strong financial positioning.
Privia Health’s robust financial performance has been attributed to growth in implemented providers and attributed lives, as well as operational efficiency. The company ended 2024 with $491.1 million in cash and no debt, positioning it well for potential expansion and acquisitions. Analysts have expressed confidence in Privia Health’s future prospects, noting its conservative guidance and ample flexibility for growth initiatives.
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