Shares of Evolent Health (NYSE: EVH) plummeted by a staggering 33.62% in pre-market trading on November 8, 2024, following the release of the company's dismal third-quarter financial results and lowered full-year guidance.

For the third quarter, Evolent Health reported an adjusted loss per share of $0.27, widely missing analysts' consensus estimate of $0.34 earnings per share. The company's revenue for the quarter came in at $621.4 million, slightly lower than the expected $627.2 million.

Adding to the disappointment, Evolent Health lowered its full-year 2024 adjusted EBITDA guidance to a range of $160 million to $175 million, down from its previous expectations. The company cited challenges in certain areas of its business, particularly in its Specialty Performance Suite, for the poor performance and reduced outlook.

The shocking earnings miss and guidance cut were primarily driven by a significant spike in oncology costs, which contributed to higher-than-expected medical expenses. Evolent Health attributed the surge in costs to factors such as increased disease prevalence, rapid increases in unit costs, and other cost pressures.

To address this issue, the company is seeking to negotiate an additional $100 million in annualized rate increases with its partners, effective January 1, 2025. Evolent Health is also auditing claims data, managing its cost structure, and may consider exiting risk arrangements with certain partners if new rates cannot be aligned.