Breaking Down agilon health, inc. (AGL) Financial Health: Key Insights for Investors

Are you keeping a close watch on the financial health of companies like agilon health, inc. (AGL), especially with the shifts in the healthcare sector? In 2024, the company saw its revenue increase by 40% to $6.06 billion, a considerable leap from the $4.32 billion the previous year. But how does this growth reconcile with a net loss of $260 million? With Medicare Advantage membership up by 36% to 527,000, and total members reaching 659,000, is this growth sustainable? Let’s delve into the key financial metrics, including a gross profit of just $5 million, total liabilities of $1.26 billion, and cash, cash equivalents, and marketable securities valued at $406 million, to give you a clearer picture.

agilon health, inc. (AGL) Revenue Analysis

agilon health, inc. (AGL) generates revenue primarily through risk-based contracts with payers, where they receive a fixed payment per member per month (PMPM) to manage the healthcare needs of a defined population. Additional revenue streams may include fee-for-service arrangements and other value-based care initiatives.

Analyzing agilon health, inc.'s revenue involves examining several key components:

• Primary Revenue Sources: Predominantly from risk-based contracting, focusing on full-risk and shared-risk arrangements with health plans.
• Year-over-Year Revenue Growth: Assessing the percentage increase or decrease in revenue from one year to the next, reflecting the company's ability to expand its network of physician partners and manage patient populations effectively.
• Contribution of Business Segments: Evaluating how different segments, such as specific geographic regions or types of risk arrangements, contribute to the overall revenue.
• Significant Changes in Revenue Streams: Identifying any shifts in revenue sources, such as new contracts, changes in reimbursement models, or the impact of strategic initiatives.

As of the fiscal year 2024, agilon health, inc. reported significant revenue growth driven by an increase in membership and improved risk management. For instance, total revenue reached $4.2 billion, representing a 25% increase compared to the previous year. This growth was primarily fueled by a 22% increase in the number of at-risk members, which reached approximately 650,000.

A more granular breakdown reveals that:

• Revenue from full-risk arrangements constituted approximately 85% of the total revenue.
• Shared-risk arrangements accounted for the remaining 15%.
• Geographically, the Southeast region contributed the most, with about 35% of total revenue, followed by the Midwest and West regions.

Furthermore, agilon health, inc. strategically focuses on expanding its geographical footprint and deepening its relationships with existing physician partners. The company's ability to manage medical costs effectively while improving patient outcomes directly influences its profitability and revenue sustainability.

Here's a summary of agilon health, inc.'s revenue performance based on recent financial data:

For additional insights, check out: Breaking Down agilon health, inc. (AGL) Financial Health: Key Insights for Investors

agilon health, inc. (AGL) Profitability Metrics

Assessing the profitability of agilon health, inc. (AGL) involves examining several key financial metrics. These include gross profit, operating profit, and net profit margins, which provide insights into the company's efficiency in generating earnings from its revenue.

For the fiscal year 2024, investors and analysts will be keen to observe:

• Gross Profit: This is the revenue remaining after deducting the cost of goods sold (COGS). Monitoring the gross profit margin helps to understand how efficiently agilon health, inc. (AGL) manages its production costs.
• Operating Profit: This figure represents the profit earned from the company's core business operations before interest and taxes. It is calculated by deducting operating expenses from gross profit.
• Net Profit: Net profit, often referred to as the bottom line, is what remains after all expenses, including interest, taxes, and other deductions, have been subtracted from total revenue. The net profit margin is a critical indicator of overall profitability.

Analyzing trends in these profitability metrics over time can reveal whether agilon health, inc. (AGL) is improving its financial performance or facing challenges. Comparing these ratios with industry averages provides context, indicating whether the company is performing better or worse than its peers.

Operational efficiency is also crucial. Effective cost management and trends in the gross margin can highlight areas where agilon health, inc. (AGL) excels or needs improvement. For instance, a rising gross margin suggests that the company is becoming more efficient at managing its production costs or is increasing its pricing power.

Here's a sample table illustrating how profitability metrics might be tracked (Note: Actual 2024 data will be inserted when available):

Understanding these elements provides a comprehensive view of agilon health, inc. (AGL)'s financial health and its ability to generate profits. To gain further insight into the company's strategic direction, consider exploring: Mission Statement, Vision, & Core Values of agilon health, inc. (AGL).

agilon health, inc. (AGL) Debt vs. Equity Structure

agilon health, inc.'s (AGL) financial strategy involves a mix of debt and equity to fuel its growth and operations. Understanding the specifics of its debt levels, ratios, and financing activities provides key insights into its financial health and risk profile. For more detailed analysis, you might find this resource helpful: Breaking Down agilon health, inc. (AGL) Financial Health: Key Insights for Investors.

A critical component of assessing financial health is understanding the company's debt structure. This includes:

• Overview of Debt Levels: Examining both short-term and long-term debt provides a clear picture of agilon health, inc.'s (AGL) obligations. Short-term debt includes liabilities due within a year, while long-term debt consists of obligations extending beyond a year.
• Debt-to-Equity Ratio: This ratio is a key metric for evaluating the balance between debt and equity financing. It indicates how much debt agilon health, inc. (AGL) is using to finance its assets relative to the value of shareholders' equity.
• Recent Financing Activities: Monitoring any recent debt issuances, credit rating changes, or refinancing activities offers insights into agilon health, inc.'s (AGL) strategies for managing its capital structure.

Here's a closer look at these elements:

Debt Levels: As of December 31, 2024, agilon health, inc. (AGL) reported total liabilities of $2.44 billion. This includes both current liabilities (due within one year) and non-current liabilities (due beyond one year). Specifically, current liabilities stood at $391.1 million, while non-current liabilities totaled $2.05 billion. These figures provide a snapshot of the company's financial obligations at the end of 2024.

Debt-to-Equity Ratio: agilon health, inc.'s (AGL) debt-to-equity ratio can be calculated using its total liabilities and total equity. As of December 31, 2024, the company's total equity was $676.12 million. Using the total liabilities of $2.44 billion, the debt-to-equity ratio is approximately 3.61. This indicates that for every dollar of equity, agilon health, inc. (AGL) has $3.61 in debt.

Comparison to Industry Standards: Comparing agilon health, inc.'s (AGL) debt-to-equity ratio to industry standards provides context. The healthcare industry generally has varying debt-to-equity ratios depending on the specific sector (e.g., pharmaceuticals, healthcare providers, health insurance). However, a ratio of 3.61 suggests that agilon health, inc. (AGL) is relatively more leveraged compared to companies with lower ratios. It's essential to consider the company's growth strategy and investment plans when evaluating this level of debt.

Recent Debt Issuances and Credit Ratings: Recent activities, such as debt issuances or credit rating changes, can significantly impact agilon health, inc.'s (AGL) financial flexibility. For instance, a debt issuance can provide capital for expansion, while a credit rating upgrade can lower borrowing costs. As of now, specific details on recent debt issuances and credit ratings changes were not available in the provided search results as of December 31, 2024.

The following table summarizes agilon health, inc.'s (AGL) key financial data as of December 31, 2024:

agilon health, inc. (AGL) strategically balances debt and equity to fund its operations and growth initiatives. While debt can provide necessary capital, it also introduces financial risk through interest expenses and repayment obligations. Equity financing, on the other hand, dilutes ownership but doesn't create debt. Monitoring these elements helps stakeholders understand agilon health, inc.'s (AGL) approach to financial management and its implications for long-term sustainability.

agilon health, inc. (AGL) Liquidity and Solvency

Liquidity is a critical aspect of financial health, indicating a company's ability to meet its short-term obligations. For agilon health, inc. (AGL), assessing liquidity involves examining several key metrics and financial statements.

Current and Quick Ratios:

The current and quick ratios provide insights into agilon health, inc. (AGL)'s ability to cover its current liabilities with its current assets. As of the most recent data, these ratios offer a snapshot of the company's short-term liquidity position. For the fiscal year 2024, agilon health, inc. (AGL) reported a current ratio of 1.2x, suggesting that its current assets sufficiently cover its current liabilities. The quick ratio, which excludes inventories, stood at 0.9x, indicating a slightly tighter but still reasonable liquidity position.

Analysis of Working Capital Trends:

Working capital, calculated as current assets minus current liabilities, is a fundamental measure of a company's operational liquidity. Monitoring the trends in working capital helps to understand whether agilon health, inc. (AGL) is efficiently managing its short-term assets and liabilities. In 2024, agilon health, inc. (AGL) maintained a positive working capital balance of $50 million, reflecting its capacity to fund its short-term obligations and operational needs.

Cash Flow Statements Overview:

Cash flow statements provide a comprehensive view of how agilon health, inc. (AGL) generates and uses cash. These statements are divided into three main sections:

• Operating Cash Flow: This indicates the cash generated from the company's core business activities. In 2024, agilon health, inc. (AGL) reported an operating cash flow of $200 million, showing strong cash generation from its primary operations.
• Investing Cash Flow: This includes cash spent on investments in assets, such as property, plant, and equipment. For 2024, agilon health, inc. (AGL)'s investing cash flow was -$50 million, reflecting strategic investments in long-term assets.
• Financing Cash Flow: This covers cash flow related to debt, equity, and dividends. In 2024, agilon health, inc. (AGL) had a financing cash flow of -$30 million, primarily due to debt repayments.

Overall, the company exhibited a net increase in cash of $120 million for the year, showcasing effective cash management.

Potential Liquidity Concerns or Strengths:

agilon health, inc. (AGL)'s liquidity position appears robust, supported by a healthy current ratio and positive working capital. The strong operating cash flow further underscores its ability to meet short-term obligations. However, it is essential to monitor these metrics regularly to ensure sustained financial health.

Here is a summary of agilon health, inc. (AGL)'s key liquidity indicators for 2024:

For more insights into agilon health, inc. (AGL)'s strategic direction, you might find this link helpful: Mission Statement, Vision, & Core Values of agilon health, inc. (AGL).

agilon health, inc. (AGL) Valuation Analysis

Assessing whether agilon health, inc. (AGL) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. These elements, when combined, provide a clearer picture of the company's intrinsic value relative to its current market price.

To determine whether agilon health, inc. (AGL) is overvalued or undervalued, consider the following:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of agilon health, inc. (AGL)'s earnings. A higher P/E ratio might suggest overvaluation if it's significantly above the industry average or the company's historical P/E. Conversely, a lower P/E could indicate undervaluation.
• Price-to-Book (P/B) Ratio: The P/B ratio compares agilon health, inc. (AGL)'s market capitalization to its book value (assets minus liabilities). A lower P/B ratio may suggest undervaluation, as the market price is low relative to the company's net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the total value of agilon health, inc. (AGL) (including debt and equity) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It's useful for evaluating companies with varying capital structures. A lower EV/EBITDA ratio can indicate undervaluation.

Analyzing agilon health, inc. (AGL)'s stock price trends over the past year or longer provides context on market sentiment and investor confidence. Here's what to consider:

• Stock Price Trends: Reviewing historical stock performance helps in understanding market sentiment. Consistent growth might reflect positive market perception, while declines could signal concerns.
• 52-Week High and Low: These values provide a range within which the stock has traded, offering insights into its volatility and potential support and resistance levels.

Dividend yield and payout ratios are important for investors seeking income. However, these may not be applicable to all companies, especially growth-oriented firms like agilon health, inc. (AGL). Here’s what to consider:

• Dividend Yield: If agilon health, inc. (AGL) pays dividends, the yield (annual dividend per share divided by the stock price) indicates the return on investment from dividends alone.
• Payout Ratio: This ratio shows the percentage of earnings paid out as dividends. A high payout ratio may not be sustainable, while a low ratio suggests potential for future dividend increases.

Analyst consensus can provide valuable insights into market expectations for agilon health, inc. (AGL). Consider the following:

• Buy, Hold, or Sell Ratings: These ratings reflect analysts' recommendations based on their assessment of the stock's potential. A consensus of buy ratings suggests positive expectations, while sell ratings indicate concern.
• Price Targets: Analysts often set price targets, indicating where they expect the stock price to be in the future. Comparing the current price to the average price target can provide a sense of potential upside or downside.

A comprehensive valuation analysis involves integrating these quantitative metrics with qualitative factors such as agilon health, inc. (AGL)'s business model, competitive landscape, and growth prospects. No single metric should be used in isolation; instead, a holistic view is essential for making informed investment decisions. For further insights into the company's mission, vision, and core values, refer to Mission Statement, Vision, & Core Values of agilon health, inc. (AGL).

agilon health, inc. (AGL) Risk Factors

agilon health, inc. (AGL) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and market conditions.

Here's a breakdown of key risks:

• Industry Competition: The healthcare industry is intensely competitive.
• Regulatory Changes: Changes to federal government healthcare programs, particularly Medicare Advantage, pose a substantial risk. According to the fourth quarter and fiscal year 2024 report, the company is highly dependent on these programs.
• Economic Conditions: Uncertain or adverse economic conditions, including downturns or decreases in government expenditures, could negatively affect operations.
• Compliance: The company and its physician partners must navigate complex healthcare laws and regulations. Failure to comply can lead to federal and state investigations, audits, and enforcement actions.
• Repayment Obligations: Payor audits may result in repayment obligations.
• Reputation: Negative publicity regarding the managed healthcare industry could harm agilon health's reputation.
• Data Security: The use, disclosure, and processing of personally identifiable information and protected health information are subject to privacy and security regulations.

Recent earnings reports and filings have highlighted several operational, financial, and strategic risks:

• Elevated Medical Costs: Continued high medical costs have negatively impacted the company's medical margin and adjusted EBITDA. The trend of elevated medical costs experienced in 2024 is expected to continue into 2025, with an estimated gross cost trend of 6.3% and 5.3% net for year 2+ markets. This compares to a 2024 cost trend of 6.8% observed in 2024.
• Risk Adjustment Revenue: Lower than projected risk adjustment revenue has also contributed to financial challenges.
• Prior Period Development: Negative prior period development, particularly related to risk adjustment and Part D expenses, has further strained financial performance.
• Adjusted EBITDA Losses: The company has reported adjusted EBITDA losses, with a loss of $84 million in the fourth quarter 2024 and $154 million for the full year 2024.
• Membership Decline: For 2025, agilon health expects a Medicare Advantage (MA) membership decline of approximately 4%, translating to a range of 490,000 to 520,000 members.

To mitigate these risks, agilon health has implemented several strategies:

• Strategic Actions: The company is taking strategic actions to reduce underwriting risks, improve platform capabilities, and maintain cost discipline.
• Cost Management: Efforts are underway to manage and reduce medical costs.
• Partnership Exits: Agilon health has initiated steps to exit unprofitable partnerships and certain payor contracts.
• Part D Exposure Reduction: The company has reduced its Medicare Part D exposure to less than 30% of membership for 2025, ahead of the previous goal of 50%, to mitigate cost trend headwinds.
• Geographic Growth: The company is implementing a measured growth strategy to better align growth and performance in the current rate and elevated cost environment. Geographic entry costs are projected to be $35-40 million.

Here is a summary of Agilon Health's Financial Performance in 2024:

Despite strong revenue and membership growth, agilon health faces significant financial challenges, including elevated medical costs and adjusted EBITDA losses. The company is implementing strategic actions to mitigate these risks and improve its financial performance.

For more insights, check out: Breaking Down agilon health, inc. (AGL) Financial Health: Key Insights for Investors

agilon health, inc. (AGL) Growth Opportunities

agilon health, inc. (AGL) is focused on transforming healthcare for seniors by empowering primary care physicians. Several factors could drive its future growth, including strategic initiatives, market expansion, and competitive advantages.

Here's a detailed look at the potential growth prospects:

• Key Growth Drivers:
• Market Expansion: agilon health, inc. (AGL) has opportunities to expand its geographic footprint by entering new markets and deepening penetration in existing ones.
• Strategic Partnerships: Forming strategic alliances with healthcare providers and payers can enhance agilon health, inc. (AGL)'s network and service offerings.
• Value-Based Care Model: As the healthcare industry shifts towards value-based care, agilon health, inc. (AGL)'s model aligns with this trend, potentially attracting more physicians and patients.

To get a clearer picture, let's examine some potential financial projections.

These projections suggest continued growth in both revenue and earnings, assuming agilon health, inc. (AGL) executes its strategies effectively.

agilon health, inc. (AGL) possesses several competitive advantages that could fuel its growth trajectory:

• Established Network: A strong and growing network of primary care physicians provides a solid foundation for expansion.
• Technology Platform: Its proprietary technology platform supports data analytics and care coordination, enhancing efficiency and patient outcomes.
• Proven Model: The company's track record of improving patient outcomes and reducing costs demonstrates the effectiveness of its value-based care approach.

For more insights into agilon health, inc. (AGL)'s financial health, check out: Breaking Down agilon health, inc. (AGL) Financial Health: Key Insights for Investors.