Evolent Health Inc. secures $200 million in credit facilities

ARLINGTON, VA – Evolent Health, Inc. (NYSE:EVH), a $1.2 billion healthcare management services company, has announced the creation of a direct financial obligation through an amendment to its existing credit agreement. Despite experiencing a challenging period with its stock down over 56% in the past six months, according to InvestingPro data, the company maintains strong revenue growth of nearly 38% over the last twelve months. The amendment, effective as of December 6, 2024, establishes two delayed draw term loan facilities totaling $200 million, which the company intends to draw on January 31, 2025.

The new facilities consist of a $125 million 2024-A Delayed Draw Term Loan Facility and a $75 million 2024-B Delayed Draw Term Loan Facility. Evolent Health, Inc. provided notice of its intention to borrow under these facilities on January 24, 2025, with the funds expected to be used for general corporate purposes. InvestingPro analysis shows the company currently maintains a healthy current ratio of 1.04 and carries total debt of $635.21 million. Get access to detailed financial health metrics and 8 additional ProTips with an InvestingPro subscription. This includes providing working capital and managing potential future liabilities, such as the company’s Convertible Senior Notes due in October 2025.

According to the terms of the credit agreement, the delayed draw term loans will mature on December 6, 2029, unless earlier repayment is required under certain conditions outlined in the agreement. The interest rates for these loans will be either the adjusted term SOFR rate plus 5.50% or the base rate plus 4.50%, with potential reductions based on the company’s total secured leverage ratio.

Evolent Health, Inc. retains the option to prepay the delayed draw term loans, subject to premiums and a call protection premium. The call protection premium is structured to decrease over time, from an initial 2.00% of the principal amount if prepaid within the first year, to 1.00% if prepaid during the second year, and no premium after the second anniversary of the amendment’s effective date.

This financial maneuver is part of the company’s broader strategy to maintain liquidity and manage its debt profile. The 8-K filing with the Securities and Exchange Commission (SEC) provides a detailed account of the terms and conditions associated with the credit agreement.

Investors and stakeholders should note that this report includes forward-looking statements regarding the intended use of proceeds from the borrowings under the credit agreement. These statements are subject to various factors and uncertainties that could cause actual results to differ materially from those projected. While the company is currently not profitable, InvestingPro analysis indicates analysts expect profitability in 2024, with the company currently trading below its Fair Value. Access the comprehensive Pro Research Report, available for over 1,400 US stocks, to get detailed insights into Evolent Health’s financial outlook and valuation metrics.

The information disclosed in this article is based on the latest 8-K filing by Evolent Health, Inc. with the SEC.

In other recent news, Evolent Health has been the subject of several significant updates. The company has seen changes in earnings and revenue projections following a series of analyst revisions. JMP Securities reduced its price target for Evolent Health to $12 while retaining a Market Outperform rating. This came after a detailed analysis of the company’s financial outlook, which revealed a mix of revenue and profit challenges. Canaccord Genuity also lowered its price target for the company to $16, maintaining a Buy rating, in anticipation of a rebuilding year in 2025.

Truist Securities revised its financial outlook for Evolent Health, lowering the price target to $15 due to higher-than-expected utilization levels. The firm also adjusted its fourth-quarter EBITDA estimates for the company from $30 million to $24 million. Stephens analysts revised the price target for Evolent Health, reducing it to $12.00 from $16.00, while maintaining an Equal Weight rating. RBC Capital Markets adjusted its outlook on Evolent Health, reducing the price target to $17 from $20, while sustaining an Outperform rating. This revision came after the company reported success in achieving over $100 million of incremental EBITDA year-over-year through successful re-contracting initiatives.

These are among the recent developments that have shaped the company’s financial outlook. The adjustments reflect the analysts’ recalibrated expectations for the company’s earnings before interest, taxes, depreciation, and amortization. Despite these revisions, the various firms remain optimistic about Evolent Health’s market performance potential.

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