Citi sets price target for Privia Health shares, cites flexible model from Investing.com

Monday – Citi initiated coverage on Privia Health Group Inc (NASDAQ:PRVA) with a Buy rating and a $25.00 price target. The company highlights Privia Health’s flexible business model as a key advantage, particularly its ability to adapt to different market segments such as Medicare, Medicaid and commercial insurance.

According to the analyst, Privia Health’s approach allows it to navigate different levels of risk, from fee-for-service to fully capitalized models. This adaptability positions the company as a top choice within the value-based care (VBC) industry. The company compares Privia Health to a healthcare ‘asset manager’, able to shift risks in response to market conditions.

Privia Health’s comprehensive healthcare offering across all market segments and strong connections with multi-specialty groups and healthcare systems are seen as key factors that enhance Privia Health’s negotiating power with payers. These relationships are believed to increase the company’s competitive advantage.

Despite the robustness of Privia Health’s business model, its shares are down about 29% over the past year. This downturn is attributed to market perceptions that have grouped Privia Health with capitalized primary care providers. However, Citi sees the current valuation, which shows Privia Health trading at a 35% discount to historical levels and a slight discount to peers, as an attractive opportunity for investors.

InvestingPro Insights

As Privia Health Group Inc (NASDAQ:PRVA) turns heads with a new Buy rating from Citi, real-time data from InvestingPro reinforces the story. With a market capitalization of $2.15 billion and significant revenue growth of 22.19% over the trailing twelve months as of Q4 2023, Privia Health indeed reflects the flexibility and growth potential cited by analysts. The company’s price-to-earnings ratio is 91.01, which, combined with its PEG ratio of 0.28, suggests that its earnings growth could be undervalued compared to its peers.

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Two relevant InvestingPro tips for Privia Health include the company holding more cash than debt, which provides a solid financial cushion, and the expectation that net profit is expected to grow this year. These factors, combined with the fact that the company is trading near a 52-week low, could make a compelling case for investors considering the stock. For those who want to dive deeper, InvestingPro offers additional tips and statistics, including an analysis of the company’s fair value. Potential investors can use the coupon code PRONEWS24 to get an extra 10% off an annual or biennial Pro and Pro+ subscription and see the full list of 10 additional InvestingPro tips.

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