What Happened?
Shares of healthcare services company Astrana Health fell 16.7% in the afternoon session after the company reported third-quarter results that widely missed profit expectations and lowered its full-year financial outlook.
While revenue for the quarter grew 99.7% year-over-year to $956 million and slightly beat estimates, earnings per share came in at just $0.01. This figure was significantly below the analyst forecast of $0.43. Adding to investor concerns, Astrana Health cut its full-year revenue guidance to $3.14 billion at the midpoint, below the consensus estimate. The company also guided for full-year adjusted EBITDA of $205 million at the midpoint, which fell short of analyst expectations of $220 million. Overall, the substantial earnings miss and reduced guidance overshadowed the strong sales growth.
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What Is The Market Telling Us
Astrana Health’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for Astrana Health and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 34.2% on the news that the company reported better-than-expected second-quarter sales and significantly raised its full-year revenue forecast, overshadowing a miss on earnings per share.
The healthcare services company announced second-quarter revenue of $654.8 million, a 34.7% increase year-over-year. While this topped sales expectations, its GAAP profit of $0.19 per share fell short of analysts' consensus estimates. However, investors focused on the company's strong future outlook. Astrana boosted its full-year revenue guidance to a midpoint of $3.2 billion, a significant jump from the previous $2.6 billion forecast. Furthermore, its third-quarter revenue projection of $945 million is 17.2% above what analysts were anticipating.
Astrana Health is down 13.9% since the beginning of the year, and at $27.73 per share, it is trading 53.1% below its 52-week high of $59.08 from November 2024. Investors who bought $1,000 worth of Astrana Health’s shares 5 years ago would now be looking at an investment worth $1,569.
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