We feel now is a pretty good time to analyse Evolent Health, Inc.'s (NYSE:EVH) business as it appears the company may be on the cusp of a considerable accomplishment. Evolent Health, Inc., through its subsidiary, Evolent Health LLC, offers specialty care management services in oncology, cardiology, and musculoskeletal markets in the United States. The US$1.3b market-cap company’s loss lessened since it announced a US$142m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$104m, as it approaches breakeven. As path to profitability is the topic on Evolent Health's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Evolent Health

According to the 15 industry analysts covering Evolent Health, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$55m in 2026. So, the company is predicted to breakeven just over a year from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 63% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Evolent Health given that this is a high-level summary, though, take into account that by and large healthcare tech companies, depending on the stage of product development, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one issue worth mentioning. Evolent Health currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Evolent Health's case is 49%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Evolent Health which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Evolent Health, take a look at Evolent Health's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Evolent Health worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Evolent Health is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Evolent Health’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.