Get 40% Off
🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Stifel positive on agilon health despite recent Citron short report

Published 12/09/2022, 02:17 PM
Updated 12/09/2022, 02:23 PM
© Reuters.  Stifel positive on Agilon Health (AGL) despite recent Citron short report
AGL
-

By Sam Boughedda

agilon health Inc (NYSE:AGL) was initiated with a Buy rating and $23 per share price target at Stifel on Friday.

The Buy rating comes not long after short-selling investment research firm Citron released a report criticizing the company, stating "the best days of Agilon are behind it," and the firm "unknowingly got torpedoed" by the U.S. Supreme Court without Wall Street noticing.

However, Stifel analysts told investors in a note that they "estimate agilon can increase a provider groups' total revenue per PCP by ~$50,000 in year 1 to $180,000+ by year 4."

"Large TAM/Low Penetration. agilon has a large $125 billion MA TAM growing close to 10% per year and a $158 billion DC TAM, which we expect to remain largely flat. agilon only has 2% market share in MA and less than 1% of the potential DC market," wrote the analysts. "agilon grew 51% in 2021, and guided to 46% growth in 2022. We are projecting growth of 51% in 2023 and 35% in 2024, both ahead of consensus."

However, Stifel believes the estimates are "reasonable to conservative," as U.S. MA member growth grows close to 10% and "capitated PMPM pricing grows by mid-single digits."

"agilon offers relatively high exposure to the U.S. healthcare transition to value-based care on a platform model that is very capex and opex light. We expect agilon to continue to grow 30%+ in the medium term while expanding margins and to begin generating cash in 2023, with $1 billion in cash and no debt on the balance sheet," they concluded.

agilon shares are up 1% at the time of writing.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.