Analyst sees impact of pent-up demand on Astrana Health’s value-based care model

Truist Securities upgraded Astran Health Inc (NASDAQ:ASTH), a technology-based healthcare company.

Astrana serves over 10,000 providers and 1.0 million patients under value-based care arrangements.

As Astrana Health reported declining trends than competitors in the space, Truist wrote that the company’s care model may be taking advantage of “pent-up” demand, thereby negatively impacting the value-based care industry.

Thanks to the extensive delegation model, the Truist analyst was more confident that the company could manage utilization and monitor trends.

Truist pointed to several underappreciated tailwinds for Astrana, including:

• Astrana has a strong presence in Southern California, with rate updates for calendar year 2025 showing a 5% increase in Los Angeles County, while a 0.16% decrease was seen nationwide.
• Astrana Health’s below-average RAF score could be an advantage as the company improves its risk coding.
• Most investor meetings focused on differentiating Astrana from other VBC/Payvider companies, highlighting profitability (~10% adjusted EBITDA margin) and positive free cash flow.

Truist raised its rating from “Hold” to “Buy” with a price target of $50 (previously $44). The analyst noted that the multiple is supported by the company’s attractive growth profile, relatively better visibility, strong profitability, and attractive balance sheet and cash flow profile.

Astrana Health forecasts revenue growth of 25-30% over the next few years and 15-20% per year in the long term, excluding M&A. Including small M&A and tuck-ins, growth could rise to 20-25%. EBITDA growth is expected to be in line with or slightly below revenue growth, especially if M&A is part of the strategy.

Price promotion: ASTH shares rose 16.22% to $44.40 at last check on Thursday.

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