PRVA Stock Forecast & Price Target

Privia Health Group Inc demonstrated strong financial performance with a 43.0% year-over-year increase in other revenue for FY23, totaling $8.5 million, and a healthy continuation into YTD24 with a 10.6% annual growth. Notably, total revenue grew 4.6% year-over-year in 4Q, significantly surpassing expectations, while fee-for-service revenue, which comprises 73% of total revenue, increased by 10.8% year-over-year, indicating robust practice collections and stable administrative revenue growth. Additionally, the company's strategic expansion of Accountable Care Organizations (ACOs) from 7 to 10 in 2023 contributed to substantial savings of $177 million, reflecting successful management of medical spend across a wide provider network.

Privia Health Group Inc reported an adjusted EBITDA of $24.9 million with a margin of 4.9%, indicating an underperformance attributed primarily to lower than expected medical margins. Additionally, while a significant portion of new provider growth is being driven by referrals, resulting in reduced customer acquisition costs (CACs), this has not sufficiently offset concerns regarding capitated revenue, which has decreased and now accounts for only 27% of total revenue. The company's projections for fiscal year 2025 suggest continued challenges, with anticipated margins falling below expectations and a conservative growth model reflecting a cautious outlook in light of regulatory complications and market dynamics.