By Sam Boughedda
Agilon Health Inc (NYSE:AGL) shares dipped Monday after Citron Research released a short report on the stock.
Citron, which in January 2021, said they would stop releasing short reports following the GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) buying frenzy, recently began publishing its short research once again.
It has now taken aim at Agilon Health, stating "the best days of Agilon are behind it" as the business model "unknowingly got torpedoed" by the U.S. Supreme Court without Wall Street noticing.
"Agilon's business model is to partner with primary care physicians (PCP) and generate profits shared from cutting costs and Medicare overpayments. While the company uses many bombastic phrases like reinventing healthcare, Agilon is one of many companies in the category of 'physicians' management services," said Citron.
In addition, Citron said Agilon does not own clinics or practices and does not have long-term contracts with payors.
"This unprofitable business is based on arrangements with physician groups to split additional profitability once uploaded on the Agilon platform. The majority of these yet unrealized profits are to be generated through the increase of medical margin," they added.
The firm also argues that Agilon "inflates its medical margin by including a line item titled 'other medical expenses.'"