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TD Cowen reiterated its Buy rating and $30.00 price target on Privia Health Group Inc (NASDAQ:PRVA) on Monday, representing significant upside from the current price of $23.23. The research firm named the healthcare company its "Best Smidcap Idea," highlighting Privia’s strong financial position with over $400 million in cash and no debt. InvestingPro data confirms this strong balance sheet position, with the company maintaining zero debt-to-equity ratio.
The firm noted that Privia Health appears largely insulated from macro utilization and cost trend factors due to its large fee-for-service book and low Medicare Advantage capital exposure. With an overall financial health score of "GREAT" according to InvestingPro analysis, TD Cowen believes the company’s fiscal year 2025 guidance is achievable and potentially conservative, suggesting Privia could beat and raise guidance following its second-quarter 2025 results.
TD Cowen expressed confidence in Privia’s ability to deliver more than 20% EBITDA growth through both 2025 and 2026. Supporting this outlook, the company has demonstrated solid revenue growth of 6.79% over the last twelve months, with analysts projecting 10% growth for fiscal year 2025. The firm pointed to Medicare Shared Savings Program accruals that are approximately flat year-over-year for fiscal year 2025 as a prudent and potentially conservative approach.
The research firm emphasized Privia’s capital-light business model that generates positive free cash flow while maintaining strong EBITDA growth. TD Cowen views this combination as creating a scalable and predictable business operation.
Privia Health’s strategy of engaging physicians who want to remain independent while positioning them for risk-sharing arrangements was highlighted as a key strength. TD Cowen indicated it sees potential upside to consensus earnings estimates for the healthcare company.
In other recent news, Privia Health Group Inc. reported its financial results for the first quarter of 2025, surpassing both earnings and revenue expectations. The company achieved an earnings per share of $0.22, significantly higher than the anticipated $0.04, while revenue reached $480.1 million, exceeding the forecasted $452.13 million. Additionally, Privia Health raised its full-year 2025 guidance to the mid-to-high end of the initial range. The company announced its strategic entry into the Arizona market through the acquisition of the IMS practice, valued at $95 million, which is expected to be EBITDA positive by the fourth quarter. The firm’s adjusted EBITDA increased by 35.1% year-over-year to $26.9 million, reflecting strong operational performance. Privia Health’s practice collections also grew by 12.8% year-over-year to $798.6 million, highlighting effective growth strategies. Furthermore, the company expanded its market presence to 15 states and the District of Columbia, with a total of 4,871 implemented providers. Analysts from Truist and Nephron Research have taken note of these developments, with discussions focusing on the Arizona market entry and its implications for the company’s future growth.
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