Yahoo Finance Analysts Expect Breakeven For Evolent Health, Inc. (NYSE:EVH)
Evolent Health, Inc.'s (NYSE:EVH): Evolent Health, Inc., through its subsidiary, Evolent Health LLC, provides health care delivery and payment solutions in the United States. The company’s loss has recently broadened since it announced a -US$52.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$120.6m, moving it further away from breakeven. The most pressing concern for investors is EVH’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for EVH, its year of breakeven and its implied growth rate.
View our latest analysis for Evolent Health
EVH is bordering on breakeven, according to the 12 Healthcare Services analysts. They expect the company to post a final loss in 2021, before turning a profit of US$29m in 2022. So, EVH is predicted to breakeven approximately 2 years from today. What rate will EVH have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 55%, which signals high confidence from analysts. If this rate turns out to be too aggressive, EVH may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of EVH’s upcoming projects, however, take into account that generally healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I’d like to point out is that EVH has managed its capital judiciously, with debt making up 20% of equity. This means that EVH 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 EVH, so if you are interested in understanding the company at a deeper level, take a look at EVH’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further examine:
Valuation: What is EVH 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 EVH is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Evolent Health’s board and the CEO’s back ground.
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.
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