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Evolent Health (EVH) Prices 7M Follow-On Share Offering


Arlington, VA based Evolent Health, Inc. EVH recently announced the pricing of its follow-on public offering of 7.5 million shares of Class A common stock at $24.65 per share. The company provides integrated value-based care platform to health systems and physician organizations.

Stock Performance

The price performance of the stock has been favorable in the last three months. Evolent Health registered a return of 20.77%, outperforming the Zacks classified Internet Software sub-industry’s gain of almost 7.25%.

However, the estimate revision trend for the current year has been unfavorable as five estimates moved south in the last two months compared with no movements in the opposite direction. Thus, investors are waiting for a reversal in estimates before adding the stock. This justifies the stock’s Zacks Rank #3 (Hold).

We are optimistic about the long-term growth of the company which is pegged at 30.0%. It has projected sales growth of 64.2%, which is a lot higher than the industry average of 13.3%.

More About the Offer

Coming back to the news, the follow-on offering is expected to close on May 19, 2017. As of Mar 31, 2017, total cash, cash equivalents and investments were pegged at $138.0 million compared with $178.9 million as of Dec 31, 2016.

Based in Pittsburgh, PA, Evolent Health provides integrated value-based care platform to leading health systems and physician organizations. The company provides a combination of software and services to help large health systems. It manages the increasing amount of risk associated with insurance contracts that pay providers to keep patients health. The company also helps health systems with insurance plans.

Key Picks

Better-ranked stocks in the broader medical sector include Luminex Corporation LMNX, Hologic, Inc. HOLX and Sunshine Heart Inc SSH. Hologic and Luminex sport a Zacks Rank #1 (Strong Buy), while Sunshine Heart carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 15.4% over the last three months.

Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 25%.

Sunshine Heart recorded a stellar EPS growth rate of almost 22% (last 3–5 years of actual earnings).

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