Evolent Health (EVH.N): 2Q26 Quick Take: PS Growth and Opex Discipline Leads to Beat-and-Raise

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06 Aug 2026 08:11:06 ET │ 12 pages

Evolent Health (EVH.N)

2Q26 Quick Take: PS Growth and Opex Discipline Leads to Beat-andRaise

CITI'S TAKE

Neutral / High Risk

EVH reported a solid quarter with revenue growing 47% y/y (beating

our/cons. estimates by 3.1%/9.4%, driven predominantly by the Highmark

launch on May 1, 2026 and significant Performance Suite (PS) expansion.

PS revenue grew 81% y/y, beating our/cons. estimates by 5%/15%. The

topline strength was partially offset by elevated medical costs (MER came

in at 95.3%) leading to a 20% decline in gross profit (missing our/cons.

estimates by 5.5%/9%) reflecting the early-period launch dynamics of the

Highmark partnership. Adj. EBITDA of $28.1M (4.3% margin) was

cushioned by disciplined opex management, beating our/cons. estimates

by 18%/23% despite the MER miss. EVH raised and tightened its FY26

guidance (Rev: $2.6B–$2.7B; Adj. EBITDA: $120M–$135M), supported by

three major customer renewals/extensions, two new partnership

announcements YTD, and a 2027 revenue growth outlook of >25% y/y (vs

our/cons. expectations of 38%/17% growth) and >$150M adj. EBITDA (vs

our/cons. expectations of $149M/$161M).

Catalyst Watch: Downside, expires 22-AUG-26

Price (05 Aug 26 16:00)

US$3.08

Target price

US$6.75

Expected share price return

119.2%

Expected dividend yield

0.0%

Expected total return

119.2%

Market Cap

US$346M

Daniel GrosslightAC

Results — 2Q26 results were above expectations.

Revenue grew to $652.5M (+46.9% y/y), beating our/cons. estimates

of $632.8M/$596.7M. Growth was driven by the Performance Suite (PS) (+80.8%

y/y), which beat our/cons. estimates by 5.1%/15.2%, as PMPMs grew ~75% y/y

(offsetting lower than expected segment lives which missed our/cons. estimates

by -7.7%/-6.0%). This was offset by weaker-than-anticipated T&S

revenue of $78.2M, which missed our/cons. estimates by 3.4%/6.5%, which was

largely driven by lower than expected T&S PMPMs (which missed our/cons. by

~4%/6%) and segment lives (which missed our/cons. by 0.6%/2%). Case revenue

was +7.0% y/y, beating our/cons. estimates as EVH saw strength in both cases

(+9.1%/2.6% higher than our/cons.) and solid rev per case growth (+21.5% y/y;

…