J.P. Morgan analyst Lisa C. Gill made significant updates to the revenue estimates for Agilon Health, Inc. (NYSE:AGL) following the company’s recent fourth-quarter results. Gill now projects that Agilon’s revenue for fiscal year 2025 will reach $5.926 billion, slightly below prior expectations. This adjustment comes as the analyst recognizes 2025 as a transition year for the healthcare company, amid its ongoing recovery efforts. The revised figure means that the estimates have dropped from an earlier prediction of $6.453 billion to this new forecast. For fiscal year 2026, Agilon is expected to generate $6.594 billion in revenue, down from an original expectation of $7.319 billion. During the latest quarter, Agilon reported a fourth-quarter adjusted EPS of $(0.26), missing the consensus estimate of $(0.23); however, quarterly sales hit $1.52 billion, aligning closely with projections. Gill highlighted that this financial performance underlines the current challenges that Agilon faces while aiming for operational improvements and addressing necessary strategic changes.
In detailing the specifics, Gill estimates that Agilon Health will see revenue of $1.502 billion for the first quarter of FY25, close to the consensus of $1.503 billion, while adjusted EBITDA is predicted to be $16 million, also in line with expectations. Reported estimates for FY25 indicate an adjusted EBITDA loss of approximately $77 million, reflecting nearly unchanged expectations from analysts who anticipated a loss of $78 million. As for FY26 projections, the expected adjusted EBITDA loss has been fine-tuned to $23 million, up from the initial loss estimate of $10 million initially predicted. The financial hurdles are leading analysts to adopt a cautious stance towards Agilon’s recovery, which is reflected in how investors are positioning themselves. For instance, the stock price showed a slight dip of 0.48% at $4.18 recently.
In addition to these financial insights, Agilon Health’s CEO, Steven Sell, informed investors about his recent transactions involving the company's stock. On March 14, 2025, Sell sold 15,563 shares at a price of $4.05 each, totaling $63,030. It is worth noting that these shares were withheld by Agilon Health to fulfill tax obligations tied to performance-based restricted stock units (PSUs), not representative of open market transactions. Furthermore, Sell also acquired 42,426 shares related to the vesting of PSUs, which were originally granted back on April 14, 2022. Performance metrics over a three-year period led to a total achievement of 87%. Following these transactions, Sell now directly owns 355,310 shares, alongside an indirect ownership of 67,590 shares through a trust.
Shaker Benjamin, Agilon Health’s Chief Markets Officer, also reported stock transactions on the same day, indicating a total disposition valued at $16,779 from the withholding of 4,143 shares for tax obligations. His acquisition of 11,786 shares through vested PSUs follows similar performance metrics rewarding employees based on the company’s three-year performance goals. Following these actions, Benjamin now holds 457,058 shares, including restricted stock units, reflecting strong governance practices surrounding stock transactions within Agilon Health.
Agilon Health has seen impressive financial growth, reporting a substantial 44% increase in year-over-year revenue, amounting to $1.52 billion, which underscores the overall health of the company despite challenges in EPS. The firm’s ongoing strategic moves include exiting unprofitable partnerships while focusing on enhancing clinical and operational programs to reach cash flow breakeven by 2027. These decisions have been critical as analysts remain divided on the outlook, with some suggesting a potential overvaluation of the stock amid recent spikes.
Looking ahead, analysts from Truist Securities have revised their revenue forecasts for fiscal years 2025 and 2026 down to $5.9 billion and $6.2 billion, respectively. They also indicated greater expected adjusted EBITDA losses for these years. Meanwhile, Benchmark analysts increased their price target for Agilon Health to $4.00, and Stifel also increased their target to $3.00, with the latter emphasizing a significant focus on profitability over immediate growth for the upcoming fiscal year.
These strategic initiatives, positioned within a challenging market, aim to mitigate risks associated with Medicare Part D exposure and anticipate a slight reduction in Medicare Advantage membership by 4%. Yet, Agilon expects to gain around 20,000 new members through partnerships under negotiation. Analysts remain cautious but optimistic that the measures being implemented will navigate the company through this transitional year onward toward a more stable financial position.
Agilon Health currently offers interested investors exposure to their stock via specific ETFs like Fidelity Disruptive Medicine ETF (FMED) and SPDR S&P Health Care Services ETF (XHS) as they look to capitalize on market movements ahead.
