Core Insights - Investors often focus on the price-to-earnings (P/E) ratio for stock valuation, but it has limitations [1] - The EV-to-EBITDA ratio is considered a more comprehensive valuation metric, providing a clearer picture of a company's true value and earnings potential [2][4] Valuation Metrics - EV-to-EBITDA is calculated by dividing a company's enterprise value (EV) by its earnings before interest, taxes, depreciation, and amortization (EBITDA) [4] - EV accounts for market capitalization, debt, and preferred stock, minus cash and cash equivalents, offering a complete view of a company's value [4] - EBITDA provides insight into profitability by excluding non-cash expenses, making it a useful proxy for cash flows [4] Investment Opportunities - Stocks with low EV-to-EBITDA ratios are often seen as undervalued and attractive for acquisition [5] - Companies like Astrana Health, KT Corporation, Upbound Group, Noah Holdings, and DXP Enterprises have impressive EV-to-EBITDA ratios, indicating potential investment opportunities [3][9] Screening Criteria for Bargain Stocks - Parameters for screening include EV-to-EBITDA less than the industry median, P/E less than the industry median, and P/B less than the industry median [8][10] - Additional criteria include a minimum average trading volume, current price above $5, and a favorable Zacks Rank [11] Company Profiles - Astrana Health is a physician-centric healthcare company with a Zacks Rank of 1 and an expected earnings growth rate of 76.7% for 2025 [12][13] - KT Corporation, the largest telecommunications operator in South Korea, has a Zacks Rank of 2 and an expected earnings growth rate of 280% for 2025 [13] - Upbound Group, a lease-to-own provider, has a Zacks Rank of 2 with a projected earnings growth rate of 9.1% for 2025 [14] - Noah Holdings, a wealth management service provider in China, has a Zacks Rank of 2 and an expected earnings growth rate of 28% for 2025 [15] - DXP Enterprises, providing innovative solutions and services, has a Zacks Rank of 2 and an expected earnings growth rate of 17.5% for 2025 [16]

[Completion of Acquisition](index=2&type=section&id=Item%202.01%20Completion%20of%20Acquisition%20or%20Disposition%20of%20Assets) On July 1, 2025, Astrana Health, Inc. completed the acquisition of Alta Newport Hospital, LLC, Prospect Health Plan, Inc., and certain PHP Holdings subsidiaries for a final price of **$707.9 million**, financed by a term loan and involving ancillary agreements [Transaction Details](index=2&type=section&id=Item%202.01_1) - On July 1, 2025, the Company completed the acquisition of all outstanding equity interests of Alta Newport Hospital, LLC (doing business as Foothill Regional Medical Center) and Prospect Health Plan, Inc[5](index=5&type=chunk) - The acquisition also included substantially all assets of certain direct and indirect subsidiaries of PHP Holdings, LLC ("PHPH")[5](index=5&type=chunk) - The parties entered into a transition services agreement, under which the sellers will provide certain post-closing services to the Company[6](index=6&type=chunk) [Financial Terms and Financing](index=2&type=section&id=Item%202.01_2) Purchase Price Details | Term | Amount | | :--- | :--- | | Original Purchase Price | $745.0 million | | Final Purchase Price | $707.9 million | - The final purchase price consisted of **$707.9 million** in cash and the assumption of certain identified liabilities[7](index=7&type=chunk) - The transaction was financed using **$707.9 million** in proceeds from a five-year delayed draw term loan credit facility of up to **$745 million** with Truist Bank as the administrative agent[7](index=7&type=chunk) - A letter agreement removed certain post-closing purchase price adjustments and related escrow[6](index=6&type=chunk) [Updated Financial Guidance](index=3&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Following the acquisition, on July 2, 2025, the Company reaffirmed its second-quarter guidance and updated its full-year 2025 revenue and adjusted EBITDA forecasts, noting these preliminary figures are unaudited and subject to change - The Company issued a press release on July 2, 2025, announcing the closing of the acquisition[10](index=10&type=chunk) - The company reaffirmed its second-quarter guidance[10](index=10&type=chunk) - The company updated its full-year 2025 revenue and adjusted EBITDA guidance[10](index=10&type=chunk) - The preliminary financial results and forecasts are based on management's assumptions and are inherently uncertain; audited financials may differ materially[11](index=11&type=chunk) [Financial Statements and Exhibits](index=4&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This report lists key exhibits, including the Asset and Equity Purchase Agreement and the Second Amended and Restated Credit Agreement, with required financial statements and pro forma information to be filed via amendment within 71 days - The financial statements of the acquired businesses and the pro forma financial information are not filed with this report[16](index=16&type=chunk) - This required financial information will be filed by amendment to the Current Report no later than 71 days after the report's required filing date[16](index=16&type=chunk) - Key exhibits filed include the Asset and Equity Purchase Agreement (Exhibit 2.1), the Second Amended and Restated Credit Agreement (Exhibit 10.1), and a Press Release (Exhibit 99.1)[17](index=17&type=chunk)

Core Viewpoint - Astrana Health, Inc. has successfully completed the acquisition of Prospect Health for $708 million, aiming to enhance its capabilities in delivering high-quality, patient-centered care across the United States [1][3]. Company Overview - Astrana Health is a physician-centric, technology-enabled healthcare company focused on providing accessible, high-quality care [1][7]. - The company supports over 20,000 providers and 1.6 million patients through value-based care arrangements [8]. Acquisition Details - The acquisition of Prospect Health, initially announced at $745 million, was finalized at a reduced price of $708 million, reflecting the company's disciplined capital deployment strategy [3]. - Prospect Health operates a network of over 11,000 providers and serves approximately 600,000 members across various healthcare programs [2]. Financial Impact - Astrana expects Prospect Health to contribute approximately $1.2 billion in total revenue and $81 million in adjusted EBITDA on a full-year basis [4]. - The company has updated its full-year 2025 revenue guidance to between $3.1 billion and $3.3 billion, with adjusted EBITDA projected between $215 million and $225 million [5]. Debt and Financial Management - Following the acquisition, Astrana will have approximately $700 million of net debt and aims to reduce its net leverage ratio to below 2.5x within the next 12 to 18 months [6].

Company Overview - Astrana Health is a healthcare platform focused on accessible, high-quality, high-value care through a provider-centric, technology-driven approach[7] - The company has a significant scale with 12,000+ providers and 1.1 million members in value-based care arrangements[9] - Astrana Health operates across 16 markets with 20+ payer partners[9] Financial Performance - Astrana Health's FY 2024 Adjusted EBITDA was $170.4 million[10] - The company's FY 2024 revenue was $2.03 billion[10] - The company projects revenue between $2.5 billion and $2.7 billion for FY 2025[31] - The company projects Adjusted EBITDA between $170 million and $190 million for FY 2025[31] Growth and Strategy - Astrana Health's revenue has grown at a Compound Annual Growth Rate (CAGR) of approximately 29%[25] - Adjusted EBITDA has grown at a CAGR of approximately 22%[27] - 38% of Astrana Health's members are in full-risk arrangements[35] - The company's playbook includes growth, risk progression, outcomes and cost management, and operating leverage[35]

Summary of Astrana Health (ASTH) FY Conference Call Company Overview - **Company**: Astrana Health (ASTH) - **Industry**: Healthcare Services and Health Care Information Technology (HCIT) - **CEO**: Brandon Sim - **Conference Date**: June 04, 2025 Key Points and Arguments Business Model and Market Position - Astrana Health operates a unique model aimed at improving healthcare delivery by centralizing physician networks and reducing inefficiencies caused by multiple insurance companies managing their own networks [9][12][18] - The company has been growing rapidly, achieving over 50% year-over-year growth in Q1 of 2025, and has maintained profitability while others in the industry face challenges [10][21][44] - Astrana's model allows it to serve as a single payer for patients, which enhances long-term patient care investments and reduces administrative burdens [40][54] Financial Performance - Astrana Health has achieved a revenue compound annual growth rate (CAGR) of nearly 29% and an EBITDA CAGR of 22% over the past six years [21][22] - The company serves over 1.1 million patients and has contracts with over 12,000 physicians [21] - LTM (Last Twelve Months) revenue is over $2 billion, with LTM EBITDA exceeding $170 million [22] Growth Strategies - **Organic Growth**: Expansion in California and entry into new states like Nevada and Texas, with Nevada already profitable and Texas nearing breakeven [25][27] - **Inorganic Growth**: Strategic acquisitions of risk-bearing provider businesses, such as Community Family Care and the planned acquisition of Prospect Health for $745 million, which serves over 600,000 members [30][32] Revenue Generation - Revenue is generated from payer partners, with a focus on increasing revenue per member by transitioning members into full-risk arrangements, which can increase revenue from approximately $400 to $850-$900 per member per month [34][36][38] - The percentage of full-risk members has increased from 4% to 38%, driving 75% of revenue in Q1 2025 [37] Cost Management - Astrana Health aims to minimize cost of goods sold (COGS) and general and administrative (G&A) expenses through operational efficiencies and proprietary technology [39][46] - The company has successfully reduced medical trend costs to just over 5%, compared to the national average of close to 10% [43] Industry Challenges and Outlook - The healthcare industry faces challenges such as increased utilization and regulatory changes, but Astrana Health believes its model positions it well to navigate these headwinds [51][52] - The company anticipates continued growth due to its proactive approach in capital deployment and risk management, especially in light of favorable Medicare Advantage rate notices for 2026 [55][56] Additional Important Insights - Astrana Health's technology platform automates prior authorizations and claims processing, leading to faster payments and reduced fraud [47][48] - The company emphasizes the importance of long-term patient relationships, which enhances its ability to invest in preventive care [41][42] - Astrana Health's approach contrasts with traditional insurance models, which often lead to fragmented care and inefficiencies [9][54] This summary encapsulates the key insights from the Astrana Health FY Conference Call, highlighting the company's innovative approach, financial performance, growth strategies, and outlook in the healthcare industry.

Summary of Astrana Health (ASTH) Conference Call Company Overview - **Company**: Astrana Health - **Industry**: Healthcare Delivery - **Business Model**: Partners with physicians to create managed healthcare networks, focusing on value-based arrangements with payers [4][6] Key Business Metrics - **Physician Partnerships**: Over 12,000 physicians [4] - **Patient Base**: Approximately 1,100,000 patients in value-based arrangements [5] - **Revenue Growth**: Reported a 53% year-over-year revenue growth in Q1 [7] - **Profitability**: Continues to grow profitability and generate cash [7] Recent Acquisition - **Acquisition of Prospect Health**: - **Transaction Value**: $745 million [8] - **Network Size**: 14,000 physicians serving around 600,000 patients [10] - **Geographic Focus**: Primarily Southern California [10] - **Financials**: Prospect generated $94 million in adjusted EBITDA and $1.2 billion in revenue in 2024 [13] - **Synergies Expected**: $12 to $15 million in cost-related synergies within the first 12 to 24 months [14] Integration and Risks - **Integration Experience**: Previous successful acquisitions have built operational capabilities for seamless integration [19] - **Potential Risks**: Concerns about provider network retention during integration; however, positive reception from physicians has been noted [22][24] - **Operational Risks**: Minimal due to similarities in operational models and existing technology platforms [21] Medicare and Market Trends - **Medicare Advantage**: Represents about 60% of Astrana's business; company is not seeing the same negative trends reported by competitors [39][40] - **Risk Adjustment**: Astrana's risk scores are stable and have improved, positioning the company favorably against upcoming reforms [41][42] - **Market Outlook**: Anticipates a material tailwind from Medicare Advantage rate adjustments [50] Medicaid Insights - **Revenue Impact**: Approximately $2.6 billion in revenue, with 28% from Medicaid; potential for a 20-30% reduction in Medicaid members due to stricter eligibility checks [57][58] - **Profitability**: Medicaid is the lowest margin business but still profitable [57] Commercial Business - **Growth Strategy**: Focus on partnerships with Anthem Blue Cross to build co-branded clinics [67] - **Risk Management**: Historically avoided full risk in commercial due to scale concerns, but may explore this in the future [68] Future Guidance - **2027 EBITDA Target**: $350 million, with conservative growth assumptions [69] - **Confidence in Projections**: Strong belief in achieving guidance based on current operational strategies and market conditions [72] Conclusion - **Long-term Vision**: Astrana aims to demonstrate the viability of running a profitable value-based care company while expanding its footprint in California and beyond [73][75] - **Market Position**: Positioned as a leading player in the healthcare delivery space with a focus on quality and cost-effective care [75]

Part I [Financial Information](index=6&type=section&id=Part%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Astrana Health's Q1 2025 revenue increased 53% to $620.4 million, primarily from acquisitions, but net income declined 55% to $6.7 million [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $1.33 billion, slightly down from year-end 2024, while total liabilities decreased to $813.6 million, increasing total equity Key Balance Sheet Items ($ in thousands) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $258,517 | $288,455 | | Receivables, net | $241,078 | $225,733 | | Goodwill | $416,386 | $419,253 | | Total assets | $1,331,256 | $1,354,894 | | **Liabilities & Equity** | | | | Medical liabilities | $204,101 | $209,039 | | Long-term debt, net | $403,894 | $425,299 | | Total liabilities | $813,550 | $840,726 | | Total equity | $750,439 | $716,726 | [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q1 2025 total revenue increased 53% to $620.4 million, driven by capitation, but operating income fell 32% to $20.6 million, and net income decreased 55% to $6.7 million Q1 2025 vs. Q1 2024 Performance ($ in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $620,390 | $404,356 | | Capitation, net | $583,963 | $365,910 | | Income from operations | $20,583 | $30,139 | | Net income attributable to Astrana Health, Inc. | $6,692 | $14,835 | | Earnings per share – diluted | $0.14 | $0.31 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 operating cash flow increased to $16.6 million, investing cash outflow decreased to $2.4 million, and financing activities used $44.2 million, resulting in a net cash decrease of $29.9 million Cash Flow Summary ($ in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,627 | $5,977 | | Net cash used in investing activities | $(2,394) | $(71,039) | | Net cash (used in) provided by financing activities | $(44,170) | $106,351 | | **Net (decrease) increase in cash** | **$(29,937)** | **$41,289** | [Notes to Condensed Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail business structure, accounting policies, and key financial events, including recent acquisitions, debt refinancing, related-party transactions, and the use of VIEs across three segments - The company operates through three reportable segments: Care Partners (provider networks), Care Delivery (clinics and ancillary services), and Care Enablement (technology and MSO services)[46](index=46&type=chunk)[47](index=47&type=chunk) - In February 2025, the company entered into a Second Amended and Restated Credit Agreement, establishing a **$300M Revolver Loan**, a **$250M Term Loan**, and a **$745M Delayed Draw Term Loan**, primarily to refinance existing debt and fund the pending Prospect acquisition[97](index=97&type=chunk) - Due to corporate practice of medicine laws, the company utilizes Variable Interest Entities (VIEs), such as affiliated IPAs and medical groups, which are consolidated into its financial statements[156](index=156&type=chunk)[157](index=157&type=chunk) [Management's Discussion and Analysis (MD&A)](index=50&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2025 revenue growth to acquisitions, but higher costs led to declines in operating income and net income, with Adjusted EBITDA falling to $36.4 million [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Q1 2025 total revenue grew 53% to $620.4 million, driven by capitation, but cost of services rose 66%, leading to a 32% drop in operating income to $20.6 million and a 55% fall in net income to $6.7 million - The **53% increase in total revenue** was primarily driven by acquisitions within the Care Partners segment and more enrollees transitioning to full-risk plans[203](index=203&type=chunk) - Cost of services increased by **66%**, driven by higher medical costs associated with new acquisitions and increased participation in a value-based Medicare FFS model[204](index=204&type=chunk) - General and administrative expenses rose **13%** to **$43.9 million**, mainly due to increased costs like stock-based compensation to support operational growth[205](index=205&type=chunk) [Segment Financial Performance](index=54&type=section&id=Segment%20Financial%20Performance) In Q1 2025, Care Partners revenue grew 57% to $601.0 million, Care Delivery revenue increased 9% to $33.4 million with a wider loss, and Care Enablement revenue rose 19% to $39.6 million with flat operating income Segment Performance ($ in thousands) | Segment | Revenue Q1 2025 | Revenue Q1 2024 | % Change | Operating Income Q1 2025 | Operating Income Q1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Care Partners | $600,951 | $382,318 | 57% | $44,215 | $43,196 | 2% | | Care Delivery | $33,388 | $30,719 | 9% | $(3,108) | $(238) | * | | Care Enablement | $39,562 | $33,274 | 19% | $3,535 | $3,504 | 1% | [Non-GAAP Financial Measures](index=56&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA decreased to **$36.4 million** in Q1 2025 from $42.2 million in Q1 2024, with the margin declining from **10% to 6%**, primarily due to lower operating income and higher expenses Reconciliation of Net Income to Adjusted EBITDA ($ in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $6,221 | $16,862 | | EBITDA | $21,449 | $32,689 | | **Adjusted EBITDA** | **$36,386** | **$42,245** | | Total revenue | $620,390 | $404,356 | | **Adjusted EBITDA margin** | **6%** | **10%** | [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$260.9 million** in cash and equivalents, with liquidity enhanced by a February 2025 debt refinancing establishing over **$1.2 billion** in new credit facilities to support operations and acquisitions - Cash, cash equivalents, and marketable securities totaled **$260.9 million** at March 31, 2025[226](index=226&type=chunk) - In February 2025, the company entered into a new credit agreement providing a **$300M revolver**, **$250M term loan**, and a **$745M delayed-draw term loan**[227](index=227&type=chunk) Cash Flow Summary Q1 2025 vs Q1 2024 ($ in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,627 | $5,977 | | Net cash used in investing activities | $(2,394) | $(71,039) | | Net cash (used in) provided by financing activities | $(44,170) | $106,351 | [Quantitative and Qualitative Disclosures about Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces interest rate risk on **$412.0 million** of variable-rate debt, mitigated by an interest rate collar on the Revolver Loan with a **5.00% cap** and **2.34% floor** - The company is exposed to interest rate risk on **$412.0 million** of variable-rate debt (**$250.0M Term Loan** and **$162.0M Revolver Loan**)[238](index=238&type=chunk) - An interest rate collar agreement is used to manage risk on the Revolver Loan, with a SOFR cap of **5.00%** and a floor of **2.34%**[238](index=238&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2025[240](index=240&type=chunk) - No changes were identified in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[241](index=241&type=chunk) Part II [Other Information](index=62&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management does not expect them to have a material adverse effect on its financial condition or operations - The company is party to various lawsuits and claims in the normal course of business, but management does not expect them to have a **material adverse effect**[243](index=243&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from those disclosed in the company's 2024 Annual Report on Form 10-K - The company states there have been **no material changes** in its risk factors from those disclosed in its 2024 Annual Report on Form 10-K[245](index=245&type=chunk) [Share Repurchases and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased 444,777 shares, including 300,000 from an affiliate for **$10.6 million**, with **$40.5 million** remaining for future repurchases - As of March 31, 2025, **$40.5 million** remained available for repurchase under the company's share repurchase plan[248](index=248&type=chunk) - In Q1 2025, the company repurchased **300,000 shares** from its affiliate, Allied Physicians of California (APC), for approximately **$10.6 million**[253](index=253&type=chunk)

First Quarter 2025 May 2025 Earnings Supplement Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward- looking statements include any statements about the Company's business, financial condition, operating results, plans, objectives, expectations and intentions, expansion plans, estimates of our total addressable market, our abi ...

Company Performance - Astrana Health, Inc. reported quarterly earnings of $0.14 per share, missing the Zacks Consensus Estimate of $0.23 per share, and down from $0.31 per share a year ago, representing an earnings surprise of -39.13% [1] - The company posted revenues of $620.39 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.33%, but up from $404.36 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once, while it has topped consensus revenue estimates three times [2] Stock Outlook - Astrana Health, Inc. shares have increased by approximately 1.9% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] - The current consensus EPS estimate for the coming quarter is $0.35 on revenues of $646.89 million, and for the current fiscal year, it is $1.32 on revenues of $2.63 billion [7] - The estimate revisions trend for Astrana Health, Inc. is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which Astrana Health, Inc. belongs, is currently in the top 19% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Astrana Health (ASTH) Q1 2025 Earnings Call May 08, 2025 05:30 PM ET Company Participants Brandon Sim - President & CEOChan Basho - CFO & COORyan Daniels - Group Head–Healthcare Technology and ServicesJack Slevin - VP - Healthcare Services Equity ResearchJailendra Singh - Managing DirectorDavid Larsen - Managing DirectorZach Haggerty - Equity Research AssociateThomas Walsh - Equity Research Associate Conference Call Participants Michael Ha - Senior Research AnalystRyan Langston - Director & Senior Analyst - ...