Astrana Health has gotten torched over the last six months - since November 2024, its stock price has dropped 39.1% to $25.63 per share. This was partly driven by its softer quarterly results and might have investors contemplating their next move.
Following the drawdown, is this a buying opportunity for ASTH? Find out in our full research report, it’s free.
Why Does Astrana Health Spark Debate?
Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ:ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.
Two Things to Like:
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Astrana Health grew its sales at an exceptional 29% compounded annual growth rate. Its growth surpassed the average healthcare company and shows its offerings resonate with customers. 
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Astrana Health’s EPS grew at an astounding 25% compounded annual growth rate over the last five years. This performance was better than most healthcare businesses.
One Reason to be Careful:
New Investments Fail to Bear Fruit as ROIC Declines
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Astrana Health’s ROIC has decreased significantly over the last few years. Only time will tell if its new bets can bear fruit and potentially reverse the trend.
Final Judgment
Astrana Health’s merits more than compensate for its flaws. With the recent decline, the stock trades at 6.2× forward EV-to-EBITDA (or $25.63 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
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