By Shares of Agilon Health Inc. (AGL) were indicated down more than 1% in Friday’s premarket, following the company’s announcement of a lowered 2023 margin outlook due to higher costs. However, the company also provided an upbeat 2024 outlook.
Higher Costs Cause Revision in 2023 Margin Outlook
Agilon Health CEO, Steve Sell, stated that “higher-than-expected costs became visible to us in mid-December during the November close process given updated data from health plans and will impact our FY2023 medical margins.” As a result, the medical margin outlook for 2023 was reduced to a range of $340 million to $360 million from the previous range of $455 million to $470 million. Additionally, the revenue outlook was trimmed to a range of $4.295 billion to $4.305 billion from $4.310 billion to $4.320 billion.
Positive Outlook for 2024
Despite the revision in its short-term projections, Agilon Health expressed optimism for 2024. The company expects an increase in Medicare Advantage members, with numbers projected to be between 548,000 and 553,000. Furthermore, they anticipate a medical margin of $560 million to $600 million and total revenue between $6.35 billion and $6.42 billion. It is worth noting that these figures exceed the consensus forecast of $5.97 billion according to FactSet.
Company Performance
Over the past three months, Agilon Health’s stock has experienced a decline of 33.5%. In contrast, the Health Care Select Sector SPDR ETF has witnessed an 8.2% increase, while the S&P 500 has rallied by 10.1%. Despite recent challenges, Agilon Health remains determined to navigate the evolving healthcare landscape and capitalize on opportunities for growth.
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