Mobile Healthcare Will Expand With Aging Yet Risk Policy Changes

Key Takeaways

• Strong growth in mobile health and new verticals is expanding market opportunities, enhancing recurring revenue, and building a more resilient earnings profile.
  
• Proprietary technology and improved operational scale are driving higher efficiency, supporting improved margins, and positioning the company for long-term profitability.
  
• Heavy reliance on large contracts, margin erosion from business shifts, labor pressures, regulatory risk, and rising competition threaten DocGo’s revenue stability and long-term profitability.

Catalysts

Provides mobile health and medical transportation services in the United States and the United Kingdom.

• DocGo’s payer and provider mobile health segment is experiencing rapid growth due to increasing demand from health plans seeking to reduce medical costs and improve quality metrics, a trend fueled by both the aging population and growing preference for home-based healthcare, which is set to drive substantial recurring revenue growth over the next several years.
  
• The company’s investment in proprietary technology platforms—already integrated with major EHRs like Epic—creates a competitive advantage by enhancing operational efficiency, improving patient engagement, and allowing for scalable data-driven care delivery, which is likely to support higher net margins as density in markets increases and operating leverage takes hold.
  
• Expansion into new verticals such as chronic care management, pediatric care gap closure, and in-home phlebotomy through acquisitions like PTI Health significantly broadens DocGo’s addressable market and allows for cross-selling opportunities, directly increasing topline revenue growth and supporting a more diversified and resilient earnings profile.
  
• Medical transportation volume is expected to continue growing, approaching 700,000 transports by the end of 2026, driven by the needs of an older population, hospital capacity constraints, and a shift toward decentralized care, all of which underpin long-term demand for DocGo’s cost-effective, tech-enabled services and will be a key driver of EBITDA expansion as scale increases.
  
• As clinician utilization rates improve and DocGo continues to employ aggressive SG&A cost reductions during 2025, the Payer & Provider segment is anticipated to transition from a drag on overall gross margin to the highest-margin business line—potentially exceeding 40 percent gross margin in 2026—resulting in a rapid improvement in consolidated margins and accelerating earnings growth.

DocGo Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on DocGo compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming DocGo's revenue will decrease by 14.0% annually over the next 3 years.
• Even the bullish analysts are not forecasting that DocGo will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate DocGo's profit margin will increase from -0.1% to the average US Healthcare industry of 4.6% in 3 years.
• If DocGo's profit margin were to converge on the industry average, you could expect earnings to reach $15.2 million (and earnings per share of $0.17) by about July 2028, up from $-640.6 thousand today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 28.6x on those 2028 earnings, up from -230.5x today. This future PE is greater than the current PE for the US Healthcare industry at 21.3x.
• Analysts expect the number of shares outstanding to decline by 3.14% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.4%, as per the Simply Wall St company report.

DocGo Future Earnings Per Share Growth

Risks

• DocGo’s heavy dependence on large government and institutional contracts has been exposed as a significant risk, with current delays, policy changes, and budget cuts in its Government Population Health vertical leading to a sharp reduction in 2025 revenue guidance, suggesting ongoing vulnerability to contract non-renewals and policy-driven revenue swings that could continue to weigh on future revenues and earnings.
  
• The rapid wind-down of high-margin migrant work, which drove historical revenue and profitability, has resulted in falling gross margins, a negative swing in adjusted EBITDA, and short-term reliance on receivable collections; this shift signals that replacement business may be structurally lower margin, pressuring net margins and cash generation for several years.
  
• Wage inflation and ongoing labor shortages in the healthcare sector threaten to drive up DocGo's personnel costs, as evidenced by recent increases in staff expenses within key markets—unless technology and operational efficiencies scale dramatically, sustained margin pressures could erode earnings over the long term.
  
• The company’s mobile healthcare offerings face competitive and technological headwinds as the pace of digital health and telemedicine adoption accelerates; without clear differentiation and as more care shifts to virtual-first solutions, DocGo risks revenue stagnation or decline, especially if insurers and health systems consolidate or favor larger, fully integrated service providers.
  
• Increasing regulatory complexity and compliance burdens—including evolving standards for data privacy and AI in healthcare—are likely to demand higher operating spend, limit agility, and create ongoing legal exposure, which in turn elevates DocGo’s risk profile and may further compress net margins and dampen long-term profitability.

Valuation

• The assumed bullish price target for DocGo is $4.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of DocGo's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $4.0, and the most bearish reporting a price target of just $1.45.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $331.4 million, earnings will come to $15.2 million, and it would be trading on a PE ratio of 28.6x, assuming you use a discount rate of 6.4%.
• Given the current share price of $1.49, the bullish analyst price target of $4.0 is 62.8% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.