What Happened?
Shares of healthcare services company Agilon Health (NYSE: AGL) fell 3.9% in the morning session after the stock's negative momentum continued as the company was dropped from the S&P Health Care Services Select Industry Index.
When a company is removed from a stock index, investment funds that track that index are typically required to sell their shares of the company. This can create significant selling pressure on the stock, leading to a decline in its price, as was the case for agilon. The removal itself was the main driver behind the negative stock performance.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy agilon health? Access our full analysis report here.
What Is The Market Telling Us
agilon health’s shares are extremely volatile and have had 72 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 18 days ago when the stock dropped 7.2% on the news that Bernstein SocGen Group lowered its price target on the stock to $0.88 from $1.40, pointing to concerns about its cash flow. The firm noted the company was quickly burning through cash and needed to slow its revenue growth to work on a medical cost turnaround. This news added to a series of recent challenges for agilon health. The company had previously reported a larger-than-expected loss in its third-quarter earnings for 2025. Furthermore, it received a notice from the New York Stock Exchange for not meeting listing standards, as its average stock price had fallen below $1.00 over a 30-day period. To address the low stock price, agilon health stated it planned to pursue a reverse stock split, which would require stockholder approval.
agilon health is down 64.1% since the beginning of the year, and at $0.69 per share, it is trading 87.9% below its 52-week high of $5.68 from April 2025. Investors who bought $1,000 worth of agilon health’s shares at the IPO in April 2021 would now be looking at an investment worth $22.26.
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