What Happened?
Shares of healthcare solutions company Evolent Health (NYSE: EVH) fell 3.4% in the morning session after investment firm Stephens reiterated its 'equal weight' rating on the company. The firm maintained its $9.00 price target on the technology company's stock. An 'equal weight' rating suggests the analyst, Jeff Garro, did not foresee any significant short-term change in the company's stock performance. This reinforcement of a neutral stance may have disappointed investors who were looking for a more positive outlook, contributing to the stock's decline.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Evolent Health? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Evolent Health’s shares are extremely volatile and have had 41 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 10.6% on the news that it agreed to sell its value-based primary care business, Evolent Care Partners, to Privia Health Group for up to $113 million.
The transaction included an initial payment of $100 million, with the rest contingent on performance. This strategic sale allowed Evolent to focus on its core specialty condition management business. The company planned to use the proceeds to pay down its senior debt, a move expected to boost its annual cash flow by over $7 million and cut interest expenses by about $10 million. Alongside the announcement, Evolent reaffirmed its revenue and adjusted EBITDA guidance for the third quarter and the full year of 2025, not including the effects of the sale.
Evolent Health is down 20.1% since the beginning of the year, and at $9.18 per share, it is trading 68.7% below its 52-week high of $29.30 from September 2024. Investors who bought $1,000 worth of Evolent Health’s shares 5 years ago would now be looking at an investment worth $757.65.
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