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Winners And Losers Of Q4: Evolent Health (NYSE:EVH) Vs The Rest Of The Healthcare Technology for Providers Stocks
Winners And Losers Of Q4: Evolent Health (NYSE:EVH) Vs The Rest Of The Healthcare Technology for Providers Stocks
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Evolent Health (NYSE:EVH) and the rest of the healthcare technology for providers stocks fared in Q4.
The healthcare technology industry focuses on delivering software, data analytics, and workflow solutions to hospitals, clinics, and other care facilities. These companies enable providers to streamline operations, optimize patient outcomes, and transition to value-based care models. They boast subscription-based revenues or long-term contracts, providing financial stability and growth potential. However, they face challenges such as lengthy sales cycles, significant upfront investment in technology development, and reliance on providers’ adoption of new tools, which can be hindered by budget constraints or resistance to change. Over the next few years, the sector is poised for growth as providers increasingly prioritize digital transformation and efficiency in response to rising healthcare costs and patient demand for seamless care. Tailwinds include the growing adoption of AI-driven tools for patient engagement and operational improvements, government incentives for digitization, and the expansion of telehealth and remote patient monitoring. However, headwinds such as tightening hospital budgets, cybersecurity threats, and the fragmented nature of healthcare systems could slow adoption.
The 6 healthcare technology for providers stocks we track reported a slower Q4. As a group, revenues beat analysts’ consensus estimates by 3.1% while next quarter’s revenue guidance was 0.7% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11% since the latest earnings results.
Weakest Q4: Evolent Health (NYSE:EVH)
Founded in 2011 to transform how healthcare is delivered to patients with complex needs, Evolent Health (NYSE:EVH) provides specialty care management services and technology solutions that help health plans and providers deliver better care for patients with complex conditions.
Evolent Health reported revenues of $646.5 million, up 16.3% year on year. This print fell short of analysts’ expectations by 0.7%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates and EBITDA guidance for next quarter missing analysts’ expectations significantly.
Seth Blackley, Co-Founder and Chief Executive Officer of Evolent stated, "Evolent delivered fourth quarter and 2024 full-year results within the outlook range we provided in November, despite continued elevated oncology costs during the quarter. We also ended the year with 100% retention across our top customers which together represent over 90% of our 2024 revenue. Looking ahead, the recent changes we made in certain of our Performance Suite contracts as well as our assumptions for medical cost inflation make us feel confident in our financial outlook. Finally, we believe Evolent remains an incredibly unique asset; We have a strong team, a product that our customers value and a clinical approach that both manages healthcare affordability while also enabling the kind of care we would want for our family members."
Evolent Health Total Revenue
Evolent Health delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 16.1% since reporting and currently trades at $9.
Founded in 2005 to streamline the traditionally paper-heavy patient check-in process, Phreesia (NYSE:PHR) provides software solutions that automate patient intake, registration, and payment processes for healthcare organizations while improving patient engagement in their care.
Phreesia reported revenues of $109.7 million, up 15.4% year on year, outperforming analysts’ expectations by 0.7%. The business had a strong quarter with an impressive beat of analysts’ EPS estimates and full-year EBITDA guidance topping analysts’ expectations.
Phreesia Total Revenue
The market seems content with the results as the stock is up 2.6% since reporting. It currently trades at $24.49.
Driven by the vision of an "Autonomous Pharmacy" with zero medication errors, Omnicell (NASDAQ:OMCL) provides medication management automation and adherence tools that help healthcare systems and pharmacies reduce errors and improve efficiency.
Omnicell reported revenues of $306.9 million, up 18.6% year on year, exceeding analysts’ expectations by 2.2%. Still, it was a slower quarter as it posted EBITDA guidance for next quarter missing analysts’ expectations and a miss of analysts’ full-year EPS guidance estimates.
As expected, the stock is down 29.3% since the results and currently trades at $31.39.
Operating one of the largest healthcare group purchasing organizations in the United States with over 4,350 hospital members, Premier (NASDAQ:PINC) is a technology-driven healthcare improvement company that helps hospitals, health systems, and other providers reduce costs and improve clinical outcomes.
Premier reported revenues of $240.3 million, down 14.2% year on year. This number met analysts’ expectations. Aside from that, it was a slower quarter as it recorded a significant miss of analysts’ EPS estimates and full-year revenue guidance missing analysts’ expectations.
Premier had the slowest revenue growth among its peers. The stock is down 7.1% since reporting and currently trades at $20.82.
Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ:ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.
Astrana Health reported revenues of $665.2 million, up 88.4% year on year. This result beat analysts’ expectations by 6.9%. Taking a step back, it was a mixed quarter as it also produced full-year revenue guidance beating analysts’ expectations.
Astrana Health pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The stock is down 12.1% since reporting and currently trades at $30.50.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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