Evolent Health (EVH) stock price is $4.47, down 2.08% on the day, as of Oct 19, 2026. It has a market cap of $502.50Mn, and is classified in the Healthcare Services industry (Healthcare sector).
Enterprise Value
Margins
P/FCF
Key Stats
Market Cap502.50 Mn
P/E-0.98
P/S0.24
Div. Yield0.00
Total Debt (Qtr)966.47 Mn
Revenue Growth (1y) (Qtr)46.86
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About
Evolent Health, Inc. is a market leader in connecting care for people with complex conditions such as cancer cardiovascular disease and musculoskeletal diagnoses. The company works on behalf of health plans and other risk bearing entities and payers to support physicians and other healthcare providers in delivering high quality evidence based care to their patients. Evolent combines specialty care management services with administrative services and uses proprietary…
Evolent Health, Inc. is a market leader in connecting care for people with complex conditions such as cancer cardiovascular disease and musculoskeletal diagnoses. The company works on behalf of health plans and other risk bearing entities and payers to support physicians and other healthcare providers in delivering high quality evidence based care to their patients. Evolent combines specialty care management services with administrative services and uses proprietary technology to align financial incentives with best evidence and improve outcomes while lowering costs.
Evolent generates revenue primarily through its Specialty Care Management Services which are offered under both non capitation arrangements where fees are paid for services rendered and capitation arrangements where the company assumes responsibility for the cost of medical claims under its scope. The Administrative Services business provides recurring multiyear platform and operations contracts that include health plan services pharmacy benefit management risk management analytics and reporting and leadership and management offerings. Revenue is generally structured as a fixed fee per member per month with additional case based fees for certain specialty services. The company’s earnings grow as it adds more members expands the breadth of services sold to existing partners and attracts new partners through risk sharing arrangements.
The company operates through the following segment.
The Operating Segment encompasses the company’s Specialty Care Management Services which focus on oncology cardiology and musculoskeletal markets supported by diagnostics such as radiology and genetic testing and the Administrative Services that provide the Identifi® platform health plan services pharmacy benefit management risk management analytics and reporting and leadership and management solutions.
Evolent holds a strong position in the fragmented market for value based care solutions where it competes with a range of participants from smaller niche firms to large well financed and technologically sophisticated companies. The company’s early entry into the sector its integrated offering of specialty and administrative services and its proprietary Identifi® technology provide competitive advantages. Evolent’s provider heritage brand and partnership driven model further differentiate it by aligning incentives with physicians and payers and enabling scalable delivery of evidence based care.
Evolent serves health plans other risk bearing entities and payers as well as physicians hospitals and other healthcare providers across the United States. The company’s customer base includes national and regional Medicare Advantage plans Medicaid managed care organizations commercial insurers and health systems that seek to improve quality and reduce costs in specialty care.
Sectors:Healthcare·TechnologySector rationaleEvolent Health's primary revenue comes from Specialty Care Management Services and Administrative Services delivered to health plans and providers to manage complex medical conditions. These activities fall under Healthcare Services and Managed Care. A secondary sector of Technology is justified because the company sells its proprietary Identifi® platform as a distinct administrative service providing analytics and reporting to its partners.Industries:Healthcare ServicesHealthcare ServicesPrimaryEvolent Health delivers specialty care management services for complex conditions like cancer and cardiovascular disease, supporting physicians and providers in delivering evidence-based care. Its revenue is generated through service fees and capitation arrangements for managing patient care in outpatient and specialty settings.Managed CareManaged CareSecondaryThe company provides pharmacy benefit management (PBM) and risk management services to health plans and other risk-bearing entities. It also enters into capitation arrangements where it assumes responsibility for the cost of medical claims.Healthcare ITHealthcare ITSecondaryEvolent sells its proprietary Identifi® platform, which provides health plan services, risk management analytics, and reporting specifically designed for healthcare payers and providers.Classified using BQ-MICSCIK: 0001628908
Bull & bear
Investment Thesis
▲ Bull case
Evolent delivered a solid start to 2026 with total revenue of 496 million representing 9% sequential growth versus Q4 2025 excluding the divestiture of Evolent Care Partners and adjusted EBITDA of 22 million in line with expectations. The medical expense ratio improved 150 basis points versus Q4 2025 to 93% demonstrating better cost management. Performance Suite revenue rose 26% sequentially driven by new launches with Aetna and Highmark. Early indicators from the Aetna launch show clinical intervention and provider engagement metrics above internal targets signaling strong initial traction. These results reflect disciplined execution and growing demand for Evolent solutions especially in oncology where the company sees a long term expansion opportunity.
The company highlighted a robust pipeline particularly in oncology noting that Evolent currently manages only about 10% of the oncology market leaving ample room for growth as health plans increasingly outsource complex cancer care to specialized partners. Evolent believes it is recognized as a leader in helping plans balance quality and cost for cancer care and cites its recent wins with marquee plans such as Highmark and Aetna as evidence of strengthening market position. The oncology opportunity is supported by two factors the limited time Evolent has been active in this space and the fact that roughly half of the market remains in sourced by health plans. As cancer drug pipelines expand and treatment complexity rises more plans are expected to shift to outsourcing which should allow Evolent to meaningfully increase its share over the coming decade. This structural shift represents a durable growth driver that is not yet fully reflected in current valuations.
Evolent is investing heavily in AI and automation to drive efficiency across its specialty review processes with a goal of automating approximately 80% of authorization volume. Recent rollouts of new AI models within the imaging solution have shown auto approval increases in the high teens on evaluated cases and up to 30% in some instances with minimal clinical value loss. The addition of experienced technology leaders such as the newly appointed Chief Product Officer Archie Mayani strengthens the company’s ability to scale its technology roadmap. Automation not only reduces internal operating costs but also speeds up the provider and patient experience which aligns with broader industry trends toward standardization. Success in achieving higher automation rates would improve margins and free up resources for further investment in high growth areas like oncology.
Two new contracts announced in the quarter provide near term revenue visibility and cross sell potential. An existing Performance Suite client signed a deal for the advanced imaging solution covering 4.5 million lives across commercial Medicaid and Medicare Advantage expected to go live in Q3 pending state approvals. Separately a national payer client is expanding its existing oncology and cardiology solution in several new markets projecting over 200 million of annual revenue also slated for a Q3 launch subject to regulatory approvals. These agreements validate Evolent’s ability to sell additional solutions into its current client base and demonstrate confidence in the scalability of its platform. The shift toward an Enhanced Performance Suite structure that narrows risk corridors while still offering client guarantees creates a more sustainable operating model for both Evolent and its partners.
From a balance sheet perspective Evolent ended Q1 with 142 million of unrestricted cash and 792 million of net debt with no debt maturities until 2029 providing liquidity to support near term execution while maintaining a credible path to deleveraging over the long term. The company reiterated its full year 2026 guidance of revenue between 2.4 billion and 2.6 billion and adjusted EBITDA between 110 million and 140 million with an expected medical expense ratio of approximately 93% for the year. Management expects MER to improve steadily through year end as clinical programs and favorable contractual true ups flow through in the second half. The quarterly adjusted EBITDA cadence is projected to be in line with Q1 followed by sequential improvements of 10 million to 15 million per quarter in Q3 and Q4. Operating cash flow is forecasted at 10 million to 20 million for the year after covering roughly 60 million of annual interest expense indicating the business can generate cash while servicing its debt.
Evolent delivered a solid start to 2026 with total revenue of 496 million representing 9% sequential growth versus Q4 2025 excluding the divestiture of Evolent Care Partners and adjusted EBITDA of 22 million in line with expectations. The medical expense ratio improved 150 basis points versus Q4 2025 to 93% demonstrating better cost management. Performance Suite revenue rose 26% sequentially driven by new launches with Aetna and Highmark. Early indicators from the Aetna launch show clinical intervention and provider engagement metrics above internal targets signaling strong initial traction. These results reflect disciplined execution and growing demand for Evolent solutions especially in oncology where the company sees a long term expansion opportunity.
The company highlighted a robust pipeline particularly in oncology noting that Evolent currently manages only about 10% of the oncology market leaving ample room for growth as health plans increasingly outsource complex cancer care to specialized partners. Evolent believes it is recognized as a leader in helping plans balance quality and cost for cancer care and cites its recent wins with marquee plans such as Highmark and Aetna as evidence of strengthening market position. The oncology opportunity is supported by two factors the limited time Evolent has been active in this space and the fact that roughly half of the market remains in sourced by health plans. As cancer drug pipelines expand and treatment complexity rises more plans are expected to shift to outsourcing which should allow Evolent to meaningfully increase its share over the coming decade. This structural shift represents a durable growth driver that is not yet fully reflected in current valuations.
Evolent is investing heavily in AI and automation to drive efficiency across its specialty review processes with a goal of automating approximately 80% of authorization volume. Recent rollouts of new AI models within the imaging solution have shown auto approval increases in the high teens on evaluated cases and up to 30% in some instances with minimal clinical value loss. The addition of experienced technology leaders such as the newly appointed Chief Product Officer Archie Mayani strengthens the company’s ability to scale its technology roadmap. Automation not only reduces internal operating costs but also speeds up the provider and patient experience which aligns with broader industry trends toward standardization. Success in achieving higher automation rates would improve margins and free up resources for further investment in high growth areas like oncology.
Two new contracts announced in the quarter provide near term revenue visibility and cross sell potential. An existing Performance Suite client signed a deal for the advanced imaging solution covering 4.5 million lives across commercial Medicaid and Medicare Advantage expected to go live in Q3 pending state approvals. Separately a national payer client is expanding its existing oncology and cardiology solution in several new markets projecting over 200 million of annual revenue also slated for a Q3 launch subject to regulatory approvals. These agreements validate Evolent’s ability to sell additional solutions into its current client base and demonstrate confidence in the scalability of its platform. The shift toward an Enhanced Performance Suite structure that narrows risk corridors while still offering client guarantees creates a more sustainable operating model for both Evolent and its partners.
From a balance sheet perspective Evolent ended Q1 with 142 million of unrestricted cash and 792 million of net debt with no debt maturities until 2029 providing liquidity to support near term execution while maintaining a credible path to deleveraging over the long term. The company reiterated its full year 2026 guidance of revenue between 2.4 billion and 2.6 billion and adjusted EBITDA between 110 million and 140 million with an expected medical expense ratio of approximately 93% for the year. Management expects MER to improve steadily through year end as clinical programs and favorable contractual true ups flow through in the second half. The quarterly adjusted EBITDA cadence is projected to be in line with Q1 followed by sequential improvements of 10 million to 15 million per quarter in Q3 and Q4. Operating cash flow is forecasted at 10 million to 20 million for the year after covering roughly 60 million of annual interest expense indicating the business can generate cash while servicing its debt.
Exchange membership volatility remains a significant near term headwind for Evolent with the company assuming a 40% decline in exchange enrollment for its Specialty Tech and Services segment. Early data suggests the actual decline may be slightly lower than 40% but the outcome is still uncertain and clearer visibility is not expected until the end of Q2. The decline in exchange membership directly reduced Specialty Tech and Services revenue which fell 16% sequentially in Q1 and also increased administrative costs because the company must continue to service members during the grace period even if they ultimately disenroll. This exchange related cost pressure contributed to higher adjusted cost of revenue excluding medical claims in the quarter and is expected to normalize only after disenrollment occurs later in Q2. If the exchange decline proves larger than anticipated or persists beyond the modeled timeframe revenue and profitability could be pressured more than current guidance assumes.
Administrative services and cases revenue declined 11% quarter over quarter reflecting the termination of an administrative services client at the end of the prior year. While this loss was partially offset by better than expected membership growth from existing clients the loss of a contracted revenue stream highlights the company’s reliance on a limited number of large administrative contracts. Any further loss of similar contracts would directly impact top line growth and could require costly efforts to replace the lost revenue. The concentration risk in this line of business makes earnings more volatile than a diversified base would suggest.
The medical expense ratio showed improvement in Q1 but the underlying trend was uneven with higher than anticipated prevalence in oncology in a few exchange markets that experienced membership declines and acuity shifts. This prevalence driven cost pressure increased MER in those markets and although Evolent expects to recoup the impact later in the year through contractual protections there is no guarantee those protections will fully offset the higher costs. Reliance on contractual true ups to correct MER introduces earnings volatility and depends on the timely resolution of disputes with clients. If the protections fail to deliver the expected recovery the full year MER could remain above the 93% target squeezing margins.
Revenue true ups in Q1 were unfavorable amounting to 12 million due to lower than expected claims in certain markets which reduced revenue and partially offset by favorable prior year development. The net impact of prior year development was a little higher than 10 million favorable meaning a portion of the quarter’s earnings boost came from non recurring adjustments rather than core operating performance. Over reliance on prior year development and revenue true ups can mask underlying trends and make it difficult to assess the true profitability of the business. Investors should be cautious about assigning sustainable value to earnings that are significantly influenced by these accounting adjustments.
Although Evolent is pursuing automation goals the current results show auto approval increases only in the high teens to up to 30% on cases evaluated by new AI models falling short of the 80% threshold the company has set as a long term target. Achieving higher automation rates will require further investment technological refinement and change management across provider networks and there is no guarantee the technology will scale as expected. Additionally the company acknowledges that approximately 95% of its approval volume comes from non oncology specialties where standardization and automation are more feasible while the remaining 5% oncology segment requires deep clinical expertise and human interaction limiting the scalability of AI driven efficiency gains. This structural constraint means that even successful automation in the majority of the business may not translate into proportional margin improvement if the oncology segment continues to grow and demand more costly resources.
Exchange membership volatility remains a significant near term headwind for Evolent with the company assuming a 40% decline in exchange enrollment for its Specialty Tech and Services segment. Early data suggests the actual decline may be slightly lower than 40% but the outcome is still uncertain and clearer visibility is not expected until the end of Q2. The decline in exchange membership directly reduced Specialty Tech and Services revenue which fell 16% sequentially in Q1 and also increased administrative costs because the company must continue to service members during the grace period even if they ultimately disenroll. This exchange related cost pressure contributed to higher adjusted cost of revenue excluding medical claims in the quarter and is expected to normalize only after disenrollment occurs later in Q2. If the exchange decline proves larger than anticipated or persists beyond the modeled timeframe revenue and profitability could be pressured more than current guidance assumes.
Administrative services and cases revenue declined 11% quarter over quarter reflecting the termination of an administrative services client at the end of the prior year. While this loss was partially offset by better than expected membership growth from existing clients the loss of a contracted revenue stream highlights the company’s reliance on a limited number of large administrative contracts. Any further loss of similar contracts would directly impact top line growth and could require costly efforts to replace the lost revenue. The concentration risk in this line of business makes earnings more volatile than a diversified base would suggest.
The medical expense ratio showed improvement in Q1 but the underlying trend was uneven with higher than anticipated prevalence in oncology in a few exchange markets that experienced membership declines and acuity shifts. This prevalence driven cost pressure increased MER in those markets and although Evolent expects to recoup the impact later in the year through contractual protections there is no guarantee those protections will fully offset the higher costs. Reliance on contractual true ups to correct MER introduces earnings volatility and depends on the timely resolution of disputes with clients. If the protections fail to deliver the expected recovery the full year MER could remain above the 93% target squeezing margins.
Revenue true ups in Q1 were unfavorable amounting to 12 million due to lower than expected claims in certain markets which reduced revenue and partially offset by favorable prior year development. The net impact of prior year development was a little higher than 10 million favorable meaning a portion of the quarter’s earnings boost came from non recurring adjustments rather than core operating performance. Over reliance on prior year development and revenue true ups can mask underlying trends and make it difficult to assess the true profitability of the business. Investors should be cautious about assigning sustainable value to earnings that are significantly influenced by these accounting adjustments.
Although Evolent is pursuing automation goals the current results show auto approval increases only in the high teens to up to 30% on cases evaluated by new AI models falling short of the 80% threshold the company has set as a long term target. Achieving higher automation rates will require further investment technological refinement and change management across provider networks and there is no guarantee the technology will scale as expected. Additionally the company acknowledges that approximately 95% of its approval volume comes from non oncology specialties where standardization and automation are more feasible while the remaining 5% oncology segment requires deep clinical expertise and human interaction limiting the scalability of AI driven efficiency gains. This structural constraint means that even successful automation in the majority of the business may not translate into proportional margin improvement if the oncology segment continues to grow and demand more costly resources.