Agilon Health Inc witnessed a sharp decline in its stock today, plummeting by approximately 32%, following the revelation of the impending retirement of its Chief Financial Officer (CFO), Timothy Bensley, and a downward adjustment to its 2023 financial outlook. The stock, which closed Thursday’s session at $12.08, resumed trading on Friday morning at $7.75.
At the time of this publication, agilon health inc stock (AGL) has witnessed a decline.
agilon health inc
Current Price: $7.73
Change : -4.35
Change (%): (-36.01%)
Volume: 7.6M
Source: Tomorrow Events Market Data
Bensley, who has served as the company’s CFO, will be stepping down from his role within the next nine months. Despite his retirement, Bensley has committed to remaining in his position during the interim period to facilitate a seamless transition, as Agilon Health initiates the search for a suitable replacement.
In addition to the CFO’s retirement announcement, Agilon Health disclosed a revision to its 2023 guidance, citing unexpected increases in costs, and provided insights into its projections for the year 2024. Consequently, the company decided to withdraw its previously issued target for 2026, given the altered baseline for 2023.
The revised outlook for fiscal year 2023 indicates a lowering of revenue expectations to a range of $4.295 billion to $4.305 billion, down from the initial forecast of $4.310 billion to $4.320 billion. This adjustment falls short of the estimated revenue of $4.53 billion. Adjusted EBITDA for the same period is now projected to incur a loss ranging between $(69) million and $(55) million, a significant departure from the earlier projection of $6 million to $18 million.
The medical margin outlook for 2023 has also been revised downward by approximately $110 million, now standing at $340 million to $360 million. This adjustment is attributed to a decline in core medical performance, with $90 million in higher-than-expected medical costs and a negative revenue revision of $20 million associated with two regional health plans in new geographical areas.
Steve Sell, the Chief Executive Officer of Agilon Health, addressed the challenges, stating, “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, while Medicare Advantage membership growth and ACO REACH performance are in line with prior guidance, we are lowering Medicare Advantage medical margin guidance for 2023.”
Looking ahead to fiscal year 2024, Agilon Health anticipates a revenue range of $6.350 billion to $6.420 billion, surpassing the consensus estimate of $5.98 billion. The adjusted EBITDA for 2024 is projected to be between $40 million and $60 million, with a medical margin forecasted to fall within the range of $560 million to $600 million.
Sell commented on the company’s strategic initiatives for the upcoming year, emphasizing, “We have implemented a number of initiatives which we believe will enhance operating performance and improve the predictability of financial results in 2024 and beyond.” These initiatives include accelerating operating efficiency, refining payor partnerships, improving data visibility and analytics, and expanding onboarding support for newer Primary Care Physicians (PCPs) in mature markets. Sell concluded, “Taken together we believe these changes support Adjusted EBITDA growth in 2024 and beyond.”
