What Happened?
Shares of healthcare services company Astrana Health fell 11.7% in the afternoon session after the stock's negative momentum continued as the company's recent earnings report revealed a significant shortfall in earnings per share and a reduction in its full-year financial guidance. The move continued a sharp decline from the previous week after the healthcare company posted third-quarter earnings of just $0.01 per share, missing analysts' expectations of $0.47 by a wide margin. While revenue of $956 million came in slightly ahead of forecasts, it was not enough to offset the earnings miss. Compounding the issue, Astrana Health also lowered its fiscal year 2025 EBITDA guidance by 7%. Following the report, TD Cowen adjusted its outlook on the stock, lowering its price target to $35 from $40, although it maintained a 'Buy' rating. The combination of poor earnings and a reduced forecast prompted a negative reaction from investors.
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What Is The Market Telling Us
Astrana Health’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for Astrana Health and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 16.7% on the news that the company reported third-quarter results that widely missed profit expectations and lowered its full-year financial outlook. While revenue for the quarter grew 99.7% year-over-year to $956 million and slightly beat estimates, earnings per share came in at just $0.01. This figure was significantly below the analyst forecast of $0.43. Adding to investor concerns, Astrana Health cut its full-year revenue guidance to $3.14 billion at the midpoint, below the consensus estimate. The company also guided for full-year adjusted EBITDA of $205 million at the midpoint, which fell short of analyst expectations of $220 million. Overall, the substantial earnings miss and reduced guidance overshadowed the strong sales growth.
Astrana Health is down 30.7% since the beginning of the year, and at $22.32 per share, it is trading 52.3% below its 52-week high of $46.81 from November 2024. Investors who bought $1,000 worth of Astrana Health’s shares 5 years ago would now be looking at an investment worth $1,245.
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