- RBC Capital Markets has initiated Evolent Health ( NYSE: EVH ) with an outperform rating noting the healthcare payer and provider solutions company is poised for revenue growth.
- The firm has a $40 price target (~17% upside based on Thursday's close).
- Analyst Sean Dodge mid-teens revenue CAGR over the next three-plus years in large part due to its existing customers through cross-selling.
- While management has stated the total addressable market for its products is $130B, Dodge noted that the company believes it has only penetrated ~5% of it.
- He added that he sees growth in the Evolution Health Partners segment -- which works with independent primary-care physicians -- through "improving shared savings and an increasing # of lives moving into full capitation."
- Dodge also sees growth coming from Evolent's ( EVH ) recently announced acquisition of IPG , which provides surgical management solutions for musculoskeletal conditions.
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Evolent Health initiated at outperform at RBC on organic revenue growth opportunity