Agilon Health, a provider of support services for primary care physicians, faced a significant drop in stock value on Friday. The company attributed this decline to higher-than-expected costs and subsequently revised its profit and revenue guidance for the fiscal year ending Dec. 31, 2023.
According to available data back to April 2021, Agilon Health’s stock plummeted by 35% to $7.86, marking its largest decrease to date. Over the past 12 months, the company has experienced a staggering 49% loss. In contrast, the S&P 500 index saw a modest increase of 0.6% during the same period.
While Agilon Health expects medical margins between $340 million and $360 million, it had previously forecasted a higher range of $455 million to $470 million. This downward revision reflects the company’s increase in medical expenses due to specialist visits, Part B drugs, outpatient surgeries, and supplemental benefits. However, these higher costs were partially offset by lower hospital medical admissions.
Nonetheless, Agilon Health anticipates a rebound in margins going forward. The initial outlook for medical margins in the next fiscal year ending Dec. 31, 2024, is set between $560 million and $600 million.
It remains to be seen how Agilon Health will navigate the challenges posed by rising expenses and whether the projected rebound in margins can be achieved.
