What Happened?
Shares of healthcare tech company Privia Health Group (NASDAQ: PRVA) jumped 6.4% in the morning session after the company announced its Accountable Care Organizations (ACOs) achieved $233.1 million in Medicare shared savings for 2024, a 32% year-over-year increase.
This strong performance, which significantly outpaces industry benchmarks, prompted the company to raise its full-year 2025 Adjusted EBITDA guidance to a range of $113 million to $116 million. An Accountable Care Organization is a group of healthcare providers who work together to provide coordinated, high-quality care to their Medicare patients. The positive results also drew a favorable reaction from Wall Street. Analysts at JMP Securities raised their price target on the stock to $30 from $29, maintaining a Market Outperform rating and citing the impressive savings growth.
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What Is The Market Telling Us
Privia Health’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 5.2% as several negative developments weighed on the sector.
Weakness in managed care providers was a significant factor, with companies like Elevance Health and Humana seeing declines due to an analyst downgrade and a lost lawsuit regarding Medicare bonus payments, respectively.
Additionally, some pharmaceutical and biotech companies experienced sharp drops following unfavorable news; for instance, Sarepta Therapeutics plunged after a report indicated another patient death tied to its experimental gene therapy, and GSK's blood cancer drug dosage was voted against by the FDA advisory committee. Broader market sentiment, including concerns about rising costs and inadequate pricing for 2025 plans among health insurers, also contributed to the downward pressure on healthcare equities.
Privia Health is up 17.6% since the beginning of the year, but at $23.10 per share, it is still trading 10.1% below its 52-week high of $25.69 from March 2025. Investors who bought $1,000 worth of Privia Health’s shares at the IPO in April 2021 would now be looking at an investment worth $664.79.
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