As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the healthcare technology for providers industry, including Astrana Health (NASDAQ: ASTH) and its peers.
The healthcare technology sector provides software and data analytics to help hospitals and clinics streamline operations and improve patient outcomes, often through value-based care models. Future growth is expected as providers prioritize digital transformation to manage rising costs and patient demands. Tailwinds include the adoption of AI-driven tools and government incentives for digitization. There challenges as well, including long sales cycles and slow adoption by providers, who may be resistance to change. Tightening hospital budgets and cybersecurity threats are additional risks that could slow adoption.
The 5 healthcare technology for providers stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 4% while next quarter’s revenue guidance was in line.
Luckily, healthcare technology for providers stocks have performed well with share prices up 13.2% on average since the latest earnings results.
Astrana Health (NASDAQ: ASTH)
Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ: ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.
Astrana Health reported revenues of $654.8 million, up 34.7% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
"Astrana Health's strong second quarter results underscore the power of our physician-focused, technology-enabled model to drive profitable growth and deliver better outcomes at scale," said Brandon Sim, President and CEO of Astrana Health.
Astrana Health achieved the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 37.7% since reporting and currently trades at $29.55.
Best Q2: Privia Health (NASDAQ: PRVA)
Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ: PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.
Privia Health reported revenues of $521.2 million, up 23.4% year on year, outperforming analysts’ expectations by 10.9%. The business had a very strong quarter with an impressive beat of analysts’ sales volume and EPS estimates.
Privia Health pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 15.1% since reporting. It currently trades at $22.79.
Is now the time to buy Privia Health? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Evolent Health (NYSE: EVH)
Founded in 2011 to transform how healthcare is delivered to patients with complex needs, Evolent Health (NYSE: EVH) provides specialty care management services and technology solutions that help health plans and providers deliver better care for patients with complex conditions.
Evolent Health reported revenues of $444.3 million, down 31.3% year on year, falling short of analysts’ expectations by 3.3%. It was a softer quarter as it posted a significant miss of analysts’ EPS and sales volume estimates.
Evolent Health delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 6.9% since the results and currently trades at $9.02.
Read our full analysis of Evolent Health’s results here.
Premier (NASDAQ: PINC)
Operating one of the largest healthcare group purchasing organizations in the United States with over 4,350 hospital members, Premier (NASDAQ: PINC) is a technology-driven healthcare improvement company that helps hospitals, health systems, and other providers reduce costs and improve clinical outcomes.
Premier reported revenues of $262.9 million, down 12.5% year on year. This number beat analysts’ expectations by 5%. Overall, it was a strong quarter as it also put up a beat of analysts’ EPS estimates.
The stock is up 10.9% since reporting and currently trades at $27.13.
Read our full, actionable report on Premier here, it’s free.
Omnicell (NASDAQ: OMCL)
Driven by the vision of an "Autonomous Pharmacy" with zero medication errors, Omnicell (NASDAQ: OMCL) provides medication management automation and adherence tools that help healthcare systems and pharmacies reduce errors and improve efficiency.
Omnicell reported revenues of $290.6 million, up 5% year on year. This result surpassed analysts’ expectations by 4.9%. It was a strong quarter as it also logged a solid beat of analysts’ full-year EPS guidance estimates.
Omnicell delivered the highest full-year guidance raise among its peers. The stock is up 9.1% since reporting and currently trades at $32.46.
Read our full, actionable report on Omnicell here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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