US HealthTech & Distribution: 2QPreview: AI, Consumerism, and Value-Based Care Take Center Stage

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US HealthTech & Distribution: 2QPreview: AI, Consumerism, and Value-Based Care Take Center Stage

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23 Jul 2026 05:00:00 ET │ 92 pages

US HealthTech & Distribution

2Q Preview: AI, Consumerism, and Value-Based Care Take Center

Stage

Daniel Grosslight AC

CITI'S TAKE +1-212-816-9180

Our health tech coverage has staged an impressive recovery following 1Q daniel.grosslight@citi.com

results. This rebound was largely fueled by (1) renewed confidence in VBC Luismario Higuera

enablers (AGL is up +330% since earnings; EVH is up ~50%); (2) strategic

turnaround execution (TDOC is making significant progress in scaling its

insurance business at BetterHelp while HCAT has sold off non-core assets); luismario.higuera@citi.com

and (3) general interest in growth assets. Looking ahead to 2Q, we see most

upside from PRVA as we think they will raise guidance on continued shared

savings strength and new acquisition integration, and TDOC with

BetterHelp poised to beat on continued insurance acceleration and DTC

stabilization. We are more cautious on AGL and EVH as we think the run-up

in these stocks leaves little room for upside.

Downgrading AGL to Sell / High Risk and EVH to Neutral / High Risk — We are

downgrading AGL and EVH as we believe their risk/reward set-ups have become less

favorable with the significant run-ups in their stock prices. For AGL, while we expect

continued MLR improvement and ACO REACH performance, after a +650% run-up

this year, the stock now trades at a 38% premium to peers which we think is too rich

given AGL still faces significant risks as MA plans seek to retain margin heading into

FY27. For EVH, significant unknowns remain regarding HIX dis-enrollment, acuity

shifts, and potential Medicaid headwinds next year which we don’t think is fully