Analysts Have Been Trimming Their agilon health, inc. (NYSE:AGL) Price Target After Its Latest Report

It's been a mediocre week for agilon health, inc. (NYSE:AGL) shareholders, with the stock dropping 13% to US$0.70 in the week since its latest quarterly results. It was a pretty bad result overall; while revenues were in line with expectations at US$1.4b, statutory losses exploded to US$0.27 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the consensus forecast from agilon health's 17 analysts is for revenues of US$6.13b in 2026. This reflects a reasonable 4.1% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 48% to US$0.41. Before this latest report, the consensus had been expecting revenues of US$6.18b and US$0.41 per share in losses.

View our latest analysis for agilon health

As a result, it's unexpected to see that the consensus price target fell 8.1% to US$1.13, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values agilon health at US$2.00 per share, while the most bearish prices it at US$0.25. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that agilon health's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.3% growth on an annualised basis. This is compared to a historical growth rate of 34% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.4% annually. Factoring in the forecast slowdown in growth, it seems obvious that agilon health is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for agilon health going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for agilon health that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.