1Life Healthcare ( NASDAQ: ONEM ) is leading a decline in value-based care on Monday after Evercore ISI downgraded the operator of the One Medical primary care platform to In Line from Outperform citing the recent run up in its share price.
1Life ( ONEM ) shares surged early this month after Bloomberg reported that the company was considering options following takeover interest.
The analysts led by Elizabeth Anderson observe that the company’s valuation soared last week following the publication of the article which cited CVS Health ( CVS ) as one of the bidders.
“Given this step up in valuation as well as a degree of recession risk, we are moving to the sidelines,” the team wrote, noting the impact of rising interest rates on valuation.
In addition, Evercore pointed to certain other growth headwinds related to 1Life ( ONEM ) such as the overreliance on enterprise clients in tech (where layoffs have started) and finance (where there is heavy cyclicality).
Evercore also notes that a number of ongoing COVID testing programs could lead to additional COVID-related headwinds in 2023 and a slowing economy/recession could impact the medical spending of individual members. The price target lowered to $12 from $11 per share indicates a downside of ~5% to the last close.
Many companies offering vale-based care such as Cano Health ( CANO ) and Oak Street Health ( OSH ) have dropped sharply this year, as seen in this graph.
For further details see:
ONEM stock underperforms value-based care as Evercore downgrades