Yahoo Finance Evolent Health, Inc. (NYSE:EVH): When Will It Breakeven?
With the business potentially at an important milestone, we thought we'd take a closer look at Evolent Health, Inc.'s (NYSE:EVH) future prospects. Evolent Health, Inc., through its subsidiary, Evolent Health LLC, provides health care delivery and payment solutions in the United States. The US$2.5b market-cap company’s loss lessened since it announced a US$334m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$51m, as it approaches breakeven. The most pressing concern for investors is Evolent Health's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
Check out our latest analysis for Evolent Health
According to the 6 industry analysts covering Evolent Health, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$14m in 2023. The company is therefore projected to breakeven around 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 75% 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.
Given this is a high-level overview, we won’t go into details of Evolent Health's upcoming projects, however, keep in mind that by and large a healthcare tech company has lumpy cash flows which are contingent on the product and stage of development the company is in. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 39% 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:
There are key fundamentals of Evolent Health which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Evolent Health, take a look at Evolent Health's company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:
Valuation: What is Evolent 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 Evolent Health 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 background.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
