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Oppenheimer Believes Evolent Health (EVH) Won’t Stop Here


Oppenheimer analyst Mohan Naidu maintained a Buy rating on Evolent Health (NYSE: EVH) today and set a price target of $31. The company’s shares opened today at $25.85, close to its 52-week high of $26.35.

Naidu said:

“EVH announced the acquisition of New Century Health (NCH) for $217M cash and stock, including earnout, or 1.2x LTM revs (6/30), 10.9x adj. EBITDA, closing expected early 4Q. NCH uses clinical analytics and physician engagement/decision support to manage costs in oncology and cardiology, for 462K MA lives (>80% revs). NCH’s PMPM rev model fits nicely with EVH and has upside potential with greater MA penetration and/or new markets, though performance contracts may add EBITDA seasonality. Evolent sees limited competition given NCH’s national scope and offering breadth. We like expansion into fast-growing MA market, seen nearly doubling EVH’s MA lives to >1M of >3.5M total, focus on high-cost areas (oncology) and PMPM upside potential (NCH seen rising from $30 to $60) vs. EVH’s $13. Outperform; $31 PT.”

According to TipRanks.com, Naidu is a 5-star analyst with an average return of 18.6% and a 63.3% success rate. Naidu covers the Services sector, focusing on stocks such as Tivity Health Inc, Hms Holdings Corp, and Express Scripts.

Evolent Health has an analyst consensus of Strong Buy, with a price target consensus of $28.83, an 11.5% upside from current levels. In a report released today, Cantor Fitzgerald also reiterated a Buy rating on the stock with a $37 price target.

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Based on Evolent Health’s latest earnings release for the quarter ending June 30, the company reported a quarterly GAAP net loss of $9.92 million. In comparison, last year the company had a GAAP net loss of $16.91 million.

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Evolent Health, Inc. engages in the provision of health care delivery and payment services. Its solutions include population health management, health plan administration and third party administration, network performance management, risk adjustment, pharmacy benefit management, analytics and performance improvement, and technology and electronic medical record integration. The company was founded by Frank J. Williams, Seth B. Blackley, and Tom Peterson in August 2011 and is headquartered in Arlington, VA.