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Investing.com - JMP Securities reiterated its Market Outperform rating and $13.00 price target on Evolent Health (NYSE:EVH) on Friday. The company, currently trading at $8.65 with a market capitalization of $1 billion, shows promising potential according to InvestingPro data.
The research firm characterized Evolent’s risk/reward as "favorably skewed" and noted the company is on "firmer footing today than it has been in the past few years," citing stronger contracting mechanisms, restructured risk-based arrangements, and a growing new business pipeline.
JMP pointed out that Evolent recently traded at 10.5x its next-twelve-months adjusted EBITDA estimate, near the bottom of its two-year trading range of 9x-17x and below its 13x average multiple.
The firm views 2025 as a "trough earnings year" for Evolent but expressed "greater conviction" in its profit projections compared to prior years, partly due to potential continued oncology trend moderation in 2025.
JMP’s $13 price target is derived by applying a 14x multiple to its 2025 adjusted EBITDA estimate, with the firm noting that sentiment appears "overly negative" as shares are 20% lower than before the company’s first-quarter 2025 adjusted EBITDA beat, compared to a 4% increase in the Russell 2000.
In other recent news, Evolent Health reported its first-quarter 2025 financial results, showing a mixed performance. The company exceeded revenue expectations with $483.6 million, surpassing the forecast of $460.58 million. However, it fell short on earnings per share (EPS), reporting $0.06 against an expected $0.08. Despite the EPS miss, Evolent Health maintains a positive revenue outlook for 2025, projecting between $2.06 billion and $2.11 billion. The company also reiterated its second-quarter and full-year 2025 Adjusted EBITDA guidance, anticipating $33 million to $40 million for Q2 and $135 million to $165 million for the full year. Additionally, Evolent Health has secured a Commitment Letter with Ares Management (NYSE:ARES) Credit funds, allowing for potential non-dilutive capital borrowing to manage its 2025 Convertible Notes. CEO Seth Blackley highlighted a significant increase in the company’s forecast for new revenue bookings entering 2026. Furthermore, Evolent Health launched new oncology solutions, which are expected to enhance its market presence and operational strategies.
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