Analyst Sees Pent-Up Demand Impact On Astrana Health's Value-Based Care Model - Astrana Health (NASDAQ:ASTH)

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Loading... Loading... Truist Securities upgraded Astrana Health Inc ASTH, a technology-powered healthcare company. Astrana serves over 10,000 providers and 1.0 million patients in value-based care arrangements. With Astrana Health reporting lower trends than peers in the space, Truist wrote the company’s care model has potentially captured “pent-up” demand, adversely impacting the value-based care industry. Thanks to its comprehensive delegation model, the Truist analyst was more confident in the company’s ability to manage utilization and monitor trends. Truist pointed out several underappreciated tailwinds for Astrana, including: Astrana has a significant presence in Southern California, where the CY25 rate updates showed a 5% increase in Los Angeles County compared to a nationwide decline of 0.16%. Astrana Health’s lower-than-average RAF score could be advantageous as the company improves its risk coding. Most investor meetings focused on Astrana’s differentiation from other VBC/Payvider companies, highlighting its profitability (~10% adjusted EBITDA margin) and positive free cash flow. Truist upgraded the rating from Hold to Buy, with a price target of $50, up from $44. The analyst noted the multiple is supported by the company’s attractive growth profile, relatively better visibility, strong profitability, and attractive balance sheet and cash flow profile. Astrana Health projects revenue growth of 25%-30% over the next few years and 15%-20% annually in the longer term, excluding M&A. Including small M&A and tuck-ins, the growth could rise to 20%-25%. EBITDA growth is expected to align with or be slightly below revenue growth, mainly if M&A is part of the strategy. Price Action: ASTH shares are up 16.22% at $44.40 at last check Thursday. Read Next: Photo: Unsplash