Privia Health stock target raised to $30 by TD Cowen

On Thursday, TD Cowen maintained its Hold rating on Privia Health Group Inc (NASDAQ: PRVA) but increased the stock’s price target from $26.00 to $30.00. This adjustment follows Privia Health’s release of its fourth-quarter results for 2024, which revealed a 10% increase in GAAP revenues and a 7% rise in adjusted EBITDA, surpassing consensus expectations. The company, currently valued at $3.06 billion, has seen its stock surge 30.23% year-to-date, trading near its 52-week high of $26.04. According to InvestingPro analysis, the stock appears to be fairly valued at current levels.

Privia Health’s guidance for its 2025 adjusted EBITDA midpoint also exceeded consensus estimates by 1.4%. The company’s forecast is based on conservative value-based care (VBC) assumptions, anticipating minimal year-to-year pickup and does not account for the strategic use of its approximately $0.5 billion cash balance. InvestingPro data reveals the company holds more cash than debt on its balance sheet, with analysts expecting net income growth this year despite a relatively low gross profit margin of 9.78%.

Stifel analysts noted the company’s solid financial performance and the potential for future growth. They explained the rationale behind the price target increase, stating, "We raise our price target from $26 to $30, or 26x our 2026 EBITDA-NCI estimate."

The updated price target reflects a valuation multiple applied to the firm’s projected earnings before interest, taxes, depreciation, amortization, and non-controlling interest (EBITDA-NCI) for the year 2026. The analysts at TD Cowen have factored in the company’s current financial trajectory and market position as they set the new target.

Privia Health’s financial results and the subsequent price target revision highlight the company’s performance and its alignment with market expectations. The firm’s strategic reserves and conservative assumptions present a picture of cautious optimism for its future operations.

In other recent news, Privia Health Group Inc. reported impressive fourth-quarter earnings, with adjusted earnings per share reaching $0.21, significantly surpassing the analyst consensus estimate of $0.05. The company also exceeded revenue expectations, posting $460.9 million against the anticipated $420.94 million. For the full year 2024, Privia Health’s revenue grew to $1.74 billion, marking a 4.7% increase year-over-year, while adjusted EBITDA rose by 25.2% to $90.5 million. Citi analyst Daniel Grosslight responded to these strong results by raising the company’s price target to $32 and maintaining a Buy rating.

The company’s financial performance was driven by an 11.2% increase in implemented providers and a 12.1% rise in attributed lives. Privia Health’s operational efficiency was evident, with Care Margins expanding by 18% year-over-year and adjusted EBITDA seeing a 44% increase. Looking forward, Privia Health has issued 2025 revenue guidance of $1.8-1.9 billion, slightly below the analyst consensus of $1.89 billion, but with expectations for implemented providers to grow by 8.6-10.7%. The company ended 2024 with $491.1 million in cash and no debt, positioning it strongly for future growth initiatives, including expanding provider density and entering new markets.

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