DCGO: Future Returns Will Depend On New Longitudinal Care Contracts

Analysts have lowered their price target on DocGo from approximately 1.60 dollars to 1.00 dollars, citing a higher required discount rate and a reduced valuation multiple, despite modest improvements in the projected revenue trajectory and profit margins.

What's in the News

• DocGo signaled an active mergers and acquisitions strategy, highlighting its ability to acquire traditional health care assets and layer on its technology and mobile health capabilities to support long-term growth and shareholder value (company commentary)
• The company provided updated guidance, forecasting 2025 revenue of 315 million to 320 million dollars, including 68 million to 70 million dollars from migrant-related contracts, and 2026 revenue of 280 million to 300 million dollars with no migrant-related revenue (corporate guidance)
• DocGo recorded a goodwill impairment charge of approximately 8.7 million dollars in the third quarter of 2025, reflecting a write-down of acquired assets (company filing)
• DocGo announced a new Longitudinal Care Services program with a California-based insurer, targeting 10,000 under-engaged members with combined telehealth and in-home clinical services starting in the fourth quarter (client announcement)
• The company is expanding its partnership with a national insurer in New Mexico, launching care gap closure and planned primary care services for 10,000 Turquoise Care members through at-home visits and chronic care support (client announcement)

Valuation Changes

• The fair value estimate has fallen significantly from approximately $1.60 to $1.00 per share.
• The discount rate has risen slightly from about 6.78 percent to 6.96 percent, implying a higher required return.
• The revenue growth outlook has improved, with the projected decline moderating from around negative 11.54 percent to negative 8.12 percent.
• The net profit margin forecast has increased modestly from roughly 5.27 percent to 5.45 percent.
• The future P/E multiple has compressed notably from about 10.53x to 6.76x, reflecting a lower valuation on expected earnings.