AMEH - Apollo Medical gains after William Blair starts with outperform touts operating model

Apollo Medical ( NASDAQ: AMEH ) stock gained as much as 13.5% to $44.41 in Wednesday afternoon trading, after William Blair research started coverage of the health care services provider with an outperform rating and expressed confidence in its operating model.

Alhambra, Calif.-based AMEH runs a healthcare platform that connects insurers and Medicaid contractors to independent physician associations, providers and hospitals.

According to the company, it manages over 1.2M lives through a network of 14 IPAs and more than 9.9K contracted physicians and works with 20 plus payer partners.

"The company operates a highly scalable and replicable operating model that allows provider partners to operate in any type of reimbursement model and across all payer types," William Blair analysts Ryan Daniels and Jack Senft said in a research note, adding that ApolloMed was one of the few scaled providers actively managing Medicaid lives.

The analysts projected total revenue of $1.084B and $1.238B for 2022 and 2023, respectively, and adj. EBITDA of $150.6M and $162.1M for the company.

The company in early Aug. reiterated its FY 2022 revenue guidance of $1.055B to $1.085B and adj. EBITDA guidance of $136M to $166M.

William Blair's outperform rating on the stock is in contrast to the Wall Street average rating and Seeking Alpha Quant rating of hold.

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