What Happened?
Shares of healthcare solutions company Evolent Health (NYSE: EVH) fell 11.3% in the afternoon session after JPMorgan Chase & Co. lowered its price target on the stock from $13.00 to $7.00. Even though the investment bank kept its "overweight" rating on the technology company's shares, the large cut in the price objective signaled lower expectations for Evolent's future performance. This move suggested to the market that the stock's near-term prospects might face more hurdles than previously anticipated, despite the positive long-term rating.
The shares closed the day at $3.54, down 11.5% from previous close.
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What Is The Market Telling Us
Evolent Health’s shares are extremely volatile and have had 45 moves greater than 5% over the last year. But moves this big are rare even for Evolent Health and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 10.3% on the news that Oppenheimer significantly lowered its price target on the stock. The investment firm cut its view on the stock's future price from $18.00 to $12.00, a notable 33.33% reduction. Even with the lower price target, Oppenheimer kept its "Outperform" rating on the shares. The substantial cut in the price target likely raised concerns among investors about the company's near-term prospects, contributing to the stock's decline.
Evolent Health is down 69.2% since the beginning of the year, and at $3.54 per share, it is trading 73.3% below its 52-week high of $13.26 from November 2024. Investors who bought $1,000 worth of Evolent Health’s shares 5 years ago would now be looking at an investment worth $262.81.
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