Astrana Health Stock Slide Presents An Attractive Entry Point: Analyst

Core Viewpoint - Astrana Health Inc. experienced a significant stock decline of approximately 22% following the Centers for Medicare & Medicaid Services' proposed updates for Medicare Advantage, indicating modest payment growth in 2027 [1] Group 1: Financial Impact - The proposed changes could lead to a net average year-over-year payment increase of only 0.09%, equating to over $700 million in additional payments to Medicare Advantage plans [2] - Medicare accounts for about 61% of Astrana Health's revenue, yet the stock's decline was more pronounced compared to peers like Agilon Health Inc. and Alignment Healthcare Inc., which saw declines of about 10% and 12% respectively [4] Group 2: Company Operations - Astrana Health operates as a Management Services Organization (MSO) that provides administrative support and services to Independent Physicians Associations (IPAs) and Medical Groups [3] - The company's risk adjustment practices differ from larger payers, focusing on direct, encounter-based patient care rather than audio-only visits or standalone chart reviews, resulting in minimal exposure to the CMS's proposed risk score impacts [5] Group 3: Future Outlook - The proposed changes may enhance Astrana Health's long-term value by encouraging payers to seek fully delegated care delivery partners for better patient management and clinical documentation [6] - Astrana Health's stock is currently trading at 0.4x estimated 2027 sales and about 6x on an EV/2027 adjusted EBITDA basis, which is viewed as an attractive entry point for investors [8]