How Evolent Health’s Steep Revenue Drop and Forecast Will Impact EVH Investors

• Evolent Health, Inc. recently reported its second quarter 2025 results, revealing a decline in sales to US$444.33 million from US$647.15 million a year prior and a net loss of US$19.9 million compared to net income of US$1.6 million in the same period last year.
• The company also issued updated revenue guidance for the third quarter and full year, indicating expectations of ongoing operational pressure and slower year-over-year performance.
• We'll explore how Evolent's sharp year-over-year revenue decline could alter its investment narrative and future outlook.

Trump has pledged to "unleash" American oil and gas and these 22 US stocks have developments that are poised to benefit.

Evolent Health Investment Narrative Recap

To be a shareholder in Evolent Health, you need to believe in the company's ability to capitalize on value-based specialty care amid rapid industry change. The second quarter's sharp revenue decline and widened net loss highlight near-term operational challenges and emphasize execution risk around pipeline conversion, affecting the company's biggest current catalyst, winning and onboarding new deals, but do not materially shift the fundamental industry growth drivers for Evolent. While disappointing in the short term, the results reinforce why investors should keep an eye on deal signings and the pace of client expansion, as these are crucial for sustaining future revenue growth momentum.

Among Evolent’s recent announcements, the updated guidance for third-quarter and full-year 2025 revenue stands out, as management revised full-year expectations downward to a range of US$1.85–1.88 billion. This reset reflects ongoing operational pressures and may temper investor optimism regarding contract wins and pipeline conversion, reinforcing expectations for continued volatility in upcoming results. Leadership execution and timely deal closures remain front-and-center due to their direct impact on growth acceleration.

In contrast, what is often overlooked is the potential for delays or downsizing in new client contracts, a risk smart investors should be aware of if…

Read the full narrative on Evolent Health (it's free!)

Evolent Health's narrative projects $2.8 billion in revenue and $326.6 million in earnings by 2028. This requires 5.7% yearly revenue growth and a $467.1 million increase in earnings from the current earnings of -$140.5 million.

Uncover how Evolent Health's forecasts yield a $15.31 fair value, a 71% upside to its current price.

Exploring Other Perspectives

Fair value estimates for Evolent Health from three Simply Wall St Community members range broadly from US$15.31 to US$83.08 per share. With the company's outlook now shaped by execution risk on new contracts, you can see why investor opinions differ widely and why examining multiple viewpoints is essential.

Explore 3 other fair value estimates on Evolent Health - why the stock might be worth just $15.31!

Build Your Own Evolent Health Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Evolent Health research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Evolent Health research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Evolent Health's overall financial health at a glance.

Contemplating Other Strategies?

Opportunities like this don't last. These are today's most promising picks. Check them out now:

• The end of cancer? These 26 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.
• The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 18 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement.
• Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 27 best rare earth metal stocks of the very few that mine this essential strategic resource.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com