On Friday, Canaccord Genuity adjusted its price target for Evolent Health (NYSE:EVH), reducing it to $45.00 from the previous $47.00, while maintaining a Buy rating on the stock. The firm underlined its continued endorsement of Evolent Health as one of its focus names for 2024.
Despite fluctuations in the stock price, which varied between $28 and $34 due to broader market reactions to managed care cost trends, the analyst expressed confidence in Evolent's ability to navigate the challenges. The company demonstrated this capability with a modest increase in Medicaid utilization among the remaining post-redetermination population.
Evolent Health reported a robust fourth-quarter revenue growth of 45.4% year-over-year, surpassing both Canaccord Genuity's projections and the consensus. Although the adjusted EBITDA growth of 48.9% year-over-year fell short of estimates, it was close enough to not raise concerns.
Looking ahead, Evolent Health has issued revenue guidance for 2024 that exceeds both Canaccord Genuity's and the consensus estimates. The adjusted EBITDA outlook is also promising, with the company reiterating its goal of reaching a $300 million run rate by the end of 2024. Evolent Health has stated it needs to secure approximately $16 million in new business, translating to around $4 million per quarter, to meet this target.
Canaccord Genuity remains optimistic about Evolent Health's prospects, citing its advantageous position in helping managed care organizations tackle rising medical costs. The company's specialty care management offerings, which focus on areas such as cardiovascular, musculoskeletal, and oncology care, are seen as particularly valuable.
In light of these factors and the opportunities that lie ahead, the firm suggests that investors consider buying Evolent Health shares at the current price levels.
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