One-glance verdict
Within fair range
$7.97 our estimate vs market $4.53
Wall Street consensus: $5.75 (-27.9% lower than our fair-value estimate)
43% below our estimate
Fundamentals snapshot
Evolent Health, Inc.
EVH · NYQ · Healthcare · Health Information Services
Current price
$4.53
52-week range
$2.10 - $7.88
Market cap
$512.16M
Balance sheet
Distressed
-0.35x Concerning
Net debt $854.73M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Revenue grew 11.8% last year.
- Reward Free cash flow was positive in 2/10 years.
- Risk Net debt grew 191.0% over 3 years.
- Risk Return on equity was -67.0% last year — the company lost money on shareholders' equity.
What this company does
Evolent Health, Inc.
Evolent Health provides technology and services that help health insurance companies manage specialized care like cancer or heart treatments more efficiently. Their main income comes from selling these management services and their technology platform to health plans, which is important because it shows they have a steady stream of business. This business model is built on providing ongoing services, a type of income often called recurring revenue (money that comes in regularly and predictably).
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How the company got here
Evolent Health was founded in 2011 by a team including UPMC Health Plan and The Advisory Board Company, aiming to transform healthcare delivery by shifting from a fee-for-service model to a value-based care approach. The company went public on the New York Stock Exchange in 2015, raising significant capital to fuel its growth. Over the years, Evolent has strategically expanded its capabilities through acquisitions, such as Valence Health and, more recently, New Century Health, to bolster its focus on managing complex and high-cost medical conditions. This evolution has increasingly positioned Evolent as a specialist in managing care for patients with chronic and complex health issues.
What it actually does
Evolent Health provides technology and clinical services to health plans and healthcare providers, helping them manage costs and improve patient outcomes. Instead of selling insurance, Evolent offers solutions that streamline administrative processes, manage patient care pathways, and ensure treatments are appropriate and cost-effective. Their services are designed to help healthcare organizations navigate the complexities of managing patient populations, especially those with chronic or expensive conditions, by integrating data, clinical expertise, and operational support.
Specialty Care Management
This is a core focus for Evolent, addressing high-cost and complex medical areas like oncology (cancer care), cardiology (heart conditions), and musculoskeletal issues. Evolent provides clinical management programs and decision support tools to help ensure patients receive the most effective and evidence-based treatments. The goal is to improve patient health while managing the significant costs associated with these specialized areas of medicine, often by guiding providers on optimal treatment plans and utilization of services.
Administrative and Health Plan Services
Evolent offers a suite of services to help health plans operate more efficiently and effectively. This includes managing various administrative functions, such as processing claims, managing pharmacy benefits (pharmacy benefits management or PBM), and handling risk assessment for patient populations. They also provide analytics and reporting to help health plans understand their costs and performance, aiming to simplify the complex administrative side of healthcare.
Technology and Analytics Platform (Identifi)
At the heart of Evolent's offerings is its proprietary technology system called Identifi. This platform is designed to bring together vast amounts of healthcare data, manage care workflows, and facilitate communication with patients. It acts as a central hub that supports the company's clinical and administrative services by enabling better data analysis, care coordination, and patient engagement, which are crucial for managing costs and improving health outcomes.
What management is betting on now
Evolent's current strategy centers on deepening its expertise in specialty care management, particularly in areas like oncology and cardiology, which are major drivers of healthcare spending. Management is focused on expanding these specialized services and cross-selling them to existing health plan clients. The company is also prioritizing operational improvements and deleveraging its balance sheet, aiming to enhance profitability and cash flow. Integrating artificial intelligence (AI) into operations is another key initiative to boost efficiency, especially in administrative tasks.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$652.52M
Net income
$-28.36M
Diluted EPS
-0.25
Operating cash flow
$-9.31M
Free cash flow
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Sources
Revenue
$496.25M
Net income
$-26.63M
Diluted EPS
-0.24
Operating cash flow
$-984.00K
Free cash flow
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Sources
Revenue
$468.72M
Net income
$-429.13M
Diluted EPS
-3.84
Operating cash flow
$48.80M
Free cash flow
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Sources
Revenue
$479.53M
Net income
$-20.86M
Diluted EPS
-0.24
Operating cash flow
$15.81M
Free cash flow
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Sources
Revenue
$444.33M
Net income
$-19.90M
Diluted EPS
-0.44
Operating cash flow
$-30.33M
Free cash flow
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Sources
Revenue
$483.65M
Net income
$-64.62M
Diluted EPS
-0.63
Operating cash flow
$4.57M
Free cash flow
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Sources
Revenue
$646.54M
Net income
$-22.80M
Diluted EPS
-0.27
Operating cash flow
$-26.23M
Free cash flow
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Sources
Revenue
$621.40M
Net income
$-23.14M
Diluted EPS
-0.27
Operating cash flow
$18.67M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $7.97 vs current price $4.53
Wall Street consensus is the average analyst price target: $5.75 (-27.9% lower than our fair-value estimate).
Our most-likely fair value is $7.97 a share — about 76.0% away from today's price of $4.53, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $854.7M. Interest coverage -0.3x.
Net debt
$854.73M
Interest coverage
-0.35x
Evolent Health, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
EVH
BASELINE
Evolent Health, Inc.
Total debt $970.43M Interest coverage -0.35x This is the baseline the peer rows are being compared against.
Total debt $33.45M Interest coverage -64.32x Neither company has much profit cushion over interest right now.
Total debt $8.73M Interest coverage 32.00x This peer still has a real interest-payment cushion, while EVH does not.
Total debt $169.98M Interest coverage -1.76x Neither company has much profit cushion over interest right now.
Total debt $67.95M Interest coverage -0.95x Neither company has much profit cushion over interest right now.
What you should know
The case for and against EVH
2 Rewards
3 Risks
Rewards
-
Revenue grew 11.8% last year.
-
Free cash flow was positive in 2/10 years.
Risks
-
Net debt grew 191.0% over 3 years.
-
Return on equity was -67.0% last year — the company lost money on shareholders' equity.
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Insider ownership is only 3.1% (peer median: 6.3%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
11.22x
P/B
1.33x
P/S
0.24x
EV/EBITDA
22.39x
PEG ratio
1.93x
Profitability
How much profit each dollar creates
Gross margin
17.2%
Operating margin
-1.3%
Net margin
-24.1%
ROE
-67.0%
ROA
-0.8%
Health
Liquidity and balance-sheet strength
Debt / equity
2.53x
Current ratio
1.24x
Quick ratio
1.15x
Total debt
$970.43M
Total cash
$115.70M
Growth
How the business has been compounding
Revenue TTM
$2.10B
Revenue 5Y CAGR
19.9%
EPS TTM
-4.49
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$54.32M
Free CF TTM
$4.75M
FCF margin
0.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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