Core Viewpoint - Agilon Health (NYSE: AGL) is experiencing significant growth, with its shares up over 30% in 2025, despite the overall bear market trends [2]. Company Overview - Agilon Health provides primary care physician (PCP) services primarily to Medicare Advantage health insurance plans [2]. - The company is positioned well in the healthcare sector, particularly in the Medicare Advantage market, which is expected to grow [2]. Market Context - The broader market is currently facing turbulent bear market trends, yet Agilon Health is managing to thrive [2]. - The performance of Agilon Health's shares indicates a strong investor interest and confidence in the company's business model and market strategy [2].

Core Viewpoint - Agilon Health's stock price surged 26.1% to close at $5.36, driven by positive sentiment following a recent upgrade from Bernstein and solid trading volume [1][2]. Company Summary - Agilon Health is expected to report break-even quarterly earnings per share, reflecting a year-over-year change of -100%, with projected revenues of $1.51 billion, down 6.2% from the previous year [3]. - The consensus EPS estimate for Agilon has been revised 10% higher in the last 30 days, indicating a positive trend that may lead to further price appreciation [4]. Industry Context - Agilon Health operates within the Zacks Medical Services industry, which includes other companies like LifeMD, Inc. LifeMD's stock closed 2.5% lower at $4.82, with a 15.8% return over the past month [4]. - LifeMD's consensus EPS estimate remains unchanged at -$0.04, representing a 79% improvement from the previous year [5].

Company Overview - Agilon Health (AGL) is currently outperforming its peers in the Medical sector, with a year-to-date return of 131.6% compared to the sector average of 4.9% [4] - The Zacks Rank for Agilon Health is 2 (Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings outlooks [3] Earnings Performance - The Zacks Consensus Estimate for Agilon Health's full-year earnings has increased by 21.3% over the past quarter, reflecting improved analyst sentiment [4] - In comparison, another Medical stock, Paragon 28, Inc. (FNA), has returned 26.1% year-to-date, with a consensus EPS estimate increase of 3.1% over the past three months [5] Industry Context - Agilon Health is part of the Medical Services industry, which consists of 59 stocks and is currently ranked 63 in the Zacks Industry Rank, with an average gain of 5.6% year-to-date [6] - In contrast, Paragon 28, Inc. belongs to the Medical - Instruments industry, which has 84 stocks and is ranked 81, showing a decline of 3.1% year-to-date [6] Investment Outlook - Investors interested in Medical stocks should monitor Agilon Health and Paragon 28, Inc. for their continued strong performance [7]

Core Insights - J.P. Morgan analyst Lisa C. Gill has updated estimates for Agilon Health, Inc. following the fourth-quarter results, indicating a Neutral rating for the stock [1] Financial Performance - Agilon Health reported a fourth-quarter 2024 adjusted EPS of $(0.26), which missed the consensus estimate of $(0.23) [1] - The company's sales for the quarter were $1.52 billion, aligning with expectations [1] Future Outlook - For FY25, the revenue estimate has been revised to $5.926 billion, slightly below the consensus of $5.928 billion, down from an earlier estimate of $6.453 billion [3] - The adjusted EBITDA loss estimate for FY25 remains unchanged at $77 million, compared to a consensus loss of $78 million [3] - For FY26, the revenue estimate has been updated to $6.594 billion, below the consensus mean of $6.665 billion, down from a prior estimate of $7.319 billion [3] - The adjusted EBITDA loss estimate for FY26 has changed to $23 million, compared to a consensus loss of $22 million, revised from a previous loss estimate of $10 million [3] Strategic Positioning - The company is expected to navigate a year of transition in 2025, addressing specific challenges while positioning itself to achieve targets for 2026/2027 [2] Investment Opportunities - Investors can gain exposure to Agilon Health through Fidelity Disruptive Medicine ETF FMED and SPDR S&P Health Care Services ETF XHS [4] - As of the last check, AGL shares are down 0.48% at $4.18 [4]

Company Overview - Agilon Health (AGL) is a stock in the Medical sector, which includes 1012 individual stocks and currently holds a Zacks Sector Rank of 4 [2] - The Zacks Rank system emphasizes earnings estimates and revisions, with Agilon Health currently holding a Zacks Rank of 2 (Buy) [3] Performance Metrics - Agilon Health has returned approximately 56.8% since the beginning of the calendar year, significantly outperforming the Medical sector average return of about 6.7% [4] - The consensus estimate for Agilon Health's full-year earnings has increased by 14.5% over the past quarter, indicating improved analyst sentiment [3] Industry Comparison - Agilon Health is part of the Medical Services industry, which consists of 59 individual stocks and currently ranks 84 in the Zacks Industry Rank, with an average gain of 2.5% year to date [5] - In contrast, Akero Therapeutics, Inc. (AKRO), another outperforming Medical stock, belongs to the Medical - Biomedical and Genetics industry, which has 510 stocks and is currently ranked 71, with a year-to-date gain of 5.7% [6]

agilon health (AGL) Q4 2024 Earnings Call February 26, 2025 03:00 AM ET Company Participants Evan Smith - SVP - Investor RelationsSteven Sell - CEOJeffrey Schwaneke - Executive VP & CFOJack Slevin - VP - Healthcare Services Equity ResearchJailendra Singh - Managing DirectorThomas Walsh - Equity Research AssociateRyan Daniels - Group Head–Healthcare Technology and ServicesWhit Mayo - Senior Managing DirectorMatthew Shea - Equity Research Associate Conference Call Participants Stephen Baxter - Senior Equity R ...

Total Care Model and Partnerships - The agilon platform supports the transition to a Total Care Model, integrating technology, processes, and capital to improve healthcare outcomes[19] - The long-term partnership model with community-based physician groups typically spans 20 years, resulting in a growing and recurring revenue stream[20] - The Total Care Model incentivizes physicians to improve quality and efficiency of care, sharing financial surplus when premiums exceed medical costs[24] - The company has entered into long-term professional service agreements with anchor physician groups, typically lasting 20 years, to manage medical costs[26] - The company aims to expand its geographic reach by partnering with community-based physician groups across the United States[42] - The enterprise marketing team develops local branding strategies to support the growth of physician partners and their Medicare patient population[43] Financial and Revenue Models - Global capitation fees from health plan payor contracts are based on a defined percentage of monthly premium payments from CMS for attributed members[31] - By 2025, CMS will transition to compensating physician partners on a per beneficiary per month basis, moving away from fee-for-service compensation[39] - ACO REACH entities must implement a robust health equity plan and maintain 75% control of their governing body by participating providers by 2025[40] - The company’s contracts with payors typically have terms of one to three years, with renewal options and specific termination rights[34] - The company relies on a limited number of key payors, which poses risks if contracts cannot be secured or renewed on favorable terms[128] - The Medicare Advantage (MA) program accounted for nearly all revenues in the previous fiscal year, highlighting dependency on government programs[188] - Changes in CMS reimbursement models and risk-adjustment methodologies could significantly impact revenue and financial results[190] Regulatory Compliance and Legal Risks - The healthcare industry is subject to extensive regulation, and the company must comply with various federal, state, and local laws[61] - The federal government has utilized the FCA to prosecute various alleged false claims and fraud against Medicare and other federal healthcare programs[69] - The DOJ has initiated multiple investigations under the FCA against payors and providers for alleged improper coding, with penalties including treble damages and substantial fines[70][71] - The AKS prohibits remuneration for referrals related to federal healthcare programs, with violations potentially leading to imprisonment and fines up to $100,000 per offense[72][74] - The Stark Law restricts physician referrals for Medicare and Medicaid patients to entities with which they have a financial relationship, imposing civil penalties of up to $15,000 per service for violations[78][79] - The company has structured its business arrangements to comply with the AKS and Stark Law, ensuring that payments to providers are for healthcare services and items[75][81] - The company maintains a compliance program to monitor adherence to federal and state laws, which includes periodic audits and employee training[105] Operational Challenges and Financial Performance - The company has a history of net losses and anticipates that expenses will increase significantly in the future, potentially impacting profitability[117] - Medical expenses incurred on behalf of members may exceed the revenues received, leading to financial losses[124] - The transition to a Total Care Model may present challenges for physician partners, affecting operational efficiency and profitability[118] - The company faces risks related to regulatory compliance, which could impact operational capabilities and financial performance[114] - The company must manage increasing demands on its operational and financial systems as it grows, which may require significant capital expenditures[121] - The company may require substantial additional capital to support its business in the future, which might not be available on acceptable terms[131] Market and Competitive Environment - The healthcare industry is highly competitive, with numerous local provider networks and large payors developing their own managed care services[44] - Increased competition in the healthcare industry may challenge the company's ability to grow at projected rates, particularly as large payors develop their own managed services tools[197] - Consolidation in the healthcare industry could reduce market opportunities and adversely affect the company's financial condition[187] Cybersecurity and Data Management - The company is highly dependent on third-party service providers for critical aspects of data access, collection, storage, and transmission, which may expose it to security vulnerabilities and operational disruptions[151] - Cybersecurity threats have increased due to geopolitical events, including Russia's invasion of Ukraine, potentially leading to retaliatory cyberattacks that could disrupt operations[155] - The company may face reputational damage and regulatory penalties due to potential data security breaches involving sensitive information, including PHI[156] - The ability to attract new physician partners and retain existing members may be adversely affected by cybersecurity incidents and data breaches[157] Economic and Membership Risks - A significant reduction in membership could adversely affect the company's financial condition, cash flows, and results of operations, as compensation is based on a per-member basis[135] - Factors contributing to potential membership reduction include reliance on a limited number of payors and the quality of care provided by physician partners[136] - Public health crises, such as COVID-19, could lead to unexpected changes in healthcare service utilization, impacting financial condition and cash flows[138] - Unfavorable economic conditions may lead to reduced enrollment in MA plans, affecting overall membership, premiums, and fee revenues, which could adversely impact physician practice groups[194] Future Regulatory and Financial Outlook - Future regulations may alter the parameters of Stark Law exceptions, potentially impacting the company's operations and financial condition[82] - The future of the ACA and its underlying programs remains uncertain, impacting long-term business planning[89] - The CMS Innovation Center is testing alternative payment models, including the ACO REACH Model, which may affect financial conditions due to variable state regulations[90] - Changes in CMS methodology for calculating revenue associated with MA members could lead to underpayment relative to incurred expenses, particularly for members with severe or chronic conditions[215] - Annual adjustments by CMS to components determining revenues, such as the fee for service normalization factor and coding intensity adjustment, could further reduce revenues[216]

Revenue Growth - Revenue increased 44% to $1.52 billion in Q4 2024 compared to $1.06 billion in Q4 2023[1] - Total revenue for fiscal year 2024 reached $6.06 billion, a 40% increase from $4.32 billion in 2023[3] - Total revenues for the year ended December 31, 2024, increased to $6,060.5 million, up 40.5% from $4,316.4 million in 2023[21] - Medical services revenue for the fourth quarter of 2024 was $1,519.2 million, compared to $1,053.5 million in the same period of 2023, representing a 43.9% increase[21] Membership Growth - Medicare Advantage membership grew 36% year-over-year to 527,000 members as of December 31, 2024[3] - Full year 2025 guidance anticipates adding approximately 20,000 Medicare Advantage members[1] Financial Performance - Net loss for Q4 2024 was $106 million, a 54% improvement from a net loss of $230 million in Q4 2023[4] - The net loss for the year ended December 31, 2024, was $260.1 million, slightly improved from a net loss of $262.8 million in 2023[23] - The company reported a net loss of $(105,790) thousand for the three months ended December 31, 2024, compared to a net loss of $(230,484) thousand in 2023[31] Cost and Expenses - Total expenses for the year ended December 31, 2024, were $6,352.7 million, a 39.6% increase from $4,548.5 million in 2023[21] - Medical claims and related payables increased to $931.7 million in 2024, compared to $737.7 million in 2023, reflecting a 26.3% rise[21] - General and administrative expenses for the year ended December 31, 2024, totaled $268.9 million, down from $285.8 million in 2023[26] - The company incurred $3.6 million in impairments for the year ended December 31, 2024, compared to no impairments in 2023[23] - Other medical expenses for the twelve months ended December 31, 2024 totaled $213,159 thousand, down from $238,034 thousand in 2023[30] EBITDA and Margins - Adjusted EBITDA loss narrowed to $84 million in Q4 2024 from a loss of $137 million in Q4 2023[4] - Adjusted EBITDA for the twelve months ended December 31, 2024 was $(154,215) thousand, a decrease from $(95,001) thousand in 2023[31] - The medical margin for the three months ended December 31, 2024 was $566 thousand, compared to $(101,853) thousand in the same period of 2023[30] - The company expects Medical Margin to increase in absolute dollars as its platform matures, despite potential fluctuations in Medical Margin per member per month (PMPM)[38] Cash and Debt - Cash and cash equivalents totaled $406 million as of December 31, 2024, with total debt of $35 million[8] - Cash and cash equivalents at the end of 2024 were $193.9 million, up from $114.3 million at the end of 2023[23] Other Financial Metrics - Adjusted EBITDA contribution from ACO model entities expected to be approximately $35-$40 million for fiscal year 2025[10] - The company reported a gross profit of $(38.3) million for the fourth quarter of 2024, compared to $(94.9) million in the same quarter of 2023[25] - For the three months ended December 31, 2024, the company reported a gross profit of $(38,255) thousand, compared to $(94,868) thousand for the same period in 2023[30] - The company incurred interest expense of $6,177 thousand for the twelve months ended December 31, 2024, slightly down from $6,658 thousand in 2023[31] - The weighted average shares outstanding for the year ended December 31, 2024, were 410,966, compared to 408,917 in 2023[21] Non-GAAP Measures - The company emphasizes that Medical Margin and Adjusted EBITDA are non-GAAP financial measures that provide insight into underlying business trends and operational performance[41]

Group 1 - AGL Energy Limited reported strong earnings results for the half year, aligning with expectations [5] - The company is focused on connecting every customer to a sustainable future [5] - Markus Brokhof, the Chief Operating Officer, announced his retirement effective September 15 after five years of service [4]

Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List due to downward revisions in earnings estimates Group 1: Company Summaries - Agilon Health, Inc. (AGL) is a healthcare services provider with a current year earnings estimate revised downward by 12.7% over the last 60 days [1] - Ashtead Group plc (ASHTY) is an equipment leasing company with a current year earnings estimate revised downward by 5.1% over the last 60 days [1] - China Coal Energy Company Limited (CCOZY) is a healthcare solutions provider with a current year earnings estimate revised downward by 13.3% over the last 60 days [2]