Analyst Gary Taylor of TD Cowen maintained a Hold rating on Agilon Health (AGL – Research Report), with a price target of $6.50.
Gary Taylor has given his Hold rating due to a combination of factors surrounding Agilon Health’s recent financial guidance and operational challenges. The company significantly reduced its 2024 EBITDA projections to 50% below previous expectations and withdrew its 2026 outlook, also announcing the retirement of its CFO. Agilon’s stock experienced a sharp decline, trading below 0.4x its 2025 EV/Sales. Despite these concerns, Taylor initially maintained an Outperform rating, attributing some strategic value to the company. However, revelations that Agilon’s largest payor partners underestimated the 2024 Medicare Advantage risk have introduced additional concerns about the company’s margin potential, prompting a reassessment of its stock.
Taylor’s revised analysis reflects a more cautious perspective, with a lowered price target from $12 to $6.50 based on a valuation of 0.3x 2025 estimated EV/Gross Net Revenue including ACO Reach. This downward adjustment is in response to Agilon’s updated guidance, which has shown significant reductions in EBITDA estimates for 2024 and 2025, far below consensus forecasts. Additionally, while current liquidity does not appear to be an immediate risk, as evidenced by an expected $500 million cash balance at the end of 2023, there is potential for liquidity to become a concern if the actual cash burn for 2024 exceeds the company’s guidance. Taylor’s model anticipates a higher cash burn than Agilon has indicated, which could affect the company’s financial stability in the medium term.
In another report released on February 22, Stifel Nicolaus also maintained a Hold rating on the stock with a $9.00 price target.
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Agilon Health (AGL) Company Description:
Agilon Health Inc is transforming healthcare by empowering community-based physicians with the resources and expertise they need to innovate the payment and delivery of care for seniors. The company enables physicians to create their own Medicare-centric globally capitated line of business.
Read More on AGL:
- Agilon Health Inc (AGL) Q4 Earnings Cheat Sheet
- Agilon Health price target lowered to $9 from $10 at Stifel
- Agilon Health Announces CMO Transition and Interim Appointment
- Agilon Health says Benjamin Kornitzer to transition from role as CMO
- Agilon Health price target lowered to $11 from $23 at RBC Capital
