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agilon health, inc.'s (NYSE:AGL) Path To Profitability

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agilon health, inc. (NYSE:AGL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. agilon health, inc. offers healthcare services for seniors through primary care physicians in the communities of the United States. With the latest financial year loss of US$63m and a trailing-twelve-month loss of US$363m, the US$9.2b market-cap company amplified its loss by moving further away from its breakeven target. As path to profitability is the topic on agilon health's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for agilon health

Consensus from 9 of the American Healthcare analysts is that agilon health is on the verge of breakeven. They expect the company to post a final loss in 2022, before turning a profit of US$58m in 2023. So, the company is predicted to breakeven approximately 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of agilon health's upcoming projects, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 4.3% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on agilon health, so if you are interested in understanding the company at a deeper level, take a look at agilon health's company page on Simply Wall St. We've also compiled a list of important aspects you should further research:

  1. Valuation: What is agilon health worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether agilon health is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on agilon health’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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