What a brutal six months it’s been for Astrana Health. The stock has dropped 47.7% and now trades at $29.91, rattling many shareholders. This may have investors wondering how to approach the situation.
Given the weaker price action, is now a good time to buy ASTH? Find out in our full research report, it’s free.
Why Does ASTH Stock Spark Debate?
Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ:ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.
Two Positive Attributes:
1. Skyrocketing Revenue Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Astrana Health grew its sales at an exceptional 29.4% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers. 
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Astrana Health’s EPS grew at an astounding 18.7% compounded annual growth rate over the last five years. This performance was better than most healthcare businesses.
One Reason to be Careful:
New Investments Fail to Bear Fruit as ROIC Declines
ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Astrana Health’s ROIC has decreased significantly over the last few years. Only time will tell if its new bets can bear fruit and potentially reverse the trend.
Final Judgment
Astrana Health’s positive characteristics outweigh the negatives. After the recent drawdown, the stock trades at 7× forward EV-to-EBITDA (or $29.91 per share). Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More Than Astrana Health
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