Please ensure Javascript is enabled for purposes of website accessibility

Why Evolent Health Stock Is Jumping Today

By Prosper Junior Bakiny - Feb 26, 2021 at 1:39PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company released its quarterly update after the market closed on Thursday, and investors like what they saw.

What happened?

Shares of Evolent Health (EVH 0.56%) are rising sharply on Friday after the company announced better than expected fourth-quarter and full-year financial results. Evolent Health's stock was up by 6.6% as of 1:24 p.m. EST.

So what

During its fourth-quarter 2020 that ended on Dec. 31, Evolent Health recorded revenue of $271.9 million, representing a 15% year-over-year increase. The company's top line handily beat the Wall Street average estimate of $261.55 million. Meanwhile, the company recorded a net loss based on generally accepted accounting principles (GAAP) of $14.6 million, compared to the net loss of $198.1 million it recorded during the prior-year quarter. Analysts are often more interested in a company's non-GAAP (adjusted) bottom line, however. 

Vertical upward pointing arrows on a blackboard.

Image source: Getty Images.

On that front, Evolent Health reported an adjusted net loss of $598 thousand and an adjusted net loss per share of $0.01, compared to the adjusted loss and adjusted loss per share of $5.8 million and $0.07 it recorded during the year-ago period. On average, analysts expected the company's non-GAAP loss per share to be $0.05. For the fiscal year 2020, Evolent Health recorded revenue of $1.02 billion and an adjusted loss per share of $0.21. These numbers compare favorably to the revenue of $1.01 billion and non-GAAP loss per share of $0.24 analysts expected.

Now what

Posting revenue and earnings that top analyst estimates is a great way for a company to get the attention of investors. And since this happened for Evolent Health during a year of unprecedented challenges, it is all the more impressive. Thus, it isn't surprising to see investors bidding up this healthcare stock today. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Evolent Health, Inc. Stock Quote
Evolent Health, Inc.
EVH
$28.78 (0.56%) $0.16

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.