INDUSTRY RESEARCHHealthcare Services Public Comp Sheet and Valuation GuideQ420232Q4 2023 HEALTHCARE SERVICES PUBLIC COMP SHEET AND VALUATION GUIDEPitchBook Data, Inc.John Gabbert Founder, CEONizar Tarhuni Vice President, Institutional Research and EditorialPaul Condra Head of Emerging Technology ResearchInstitutional Research GroupAnalysispbinstitutionalresearch@pitchbook.comPublished on January 24, 2024Key takeaways• Mixed performance: Both the hospitals, rehabilitation & long-term care group and the behavioral health & home health/hospice group are overperforming the S&P 500. The former group sports EBITDA margins in the midteens to low twenties and has benefited from increased surgery volumes after the COVID-19 pandemic, while the latter continues to command strong EBITDA multiples despite some slowing revenue growth and tightening margins for Amedisys and Aveanna. The value-based care group, much of which went public in 2020 and 2021, sports negative EBITDA overall and is significantly underperforming the market.• Retailers retrench: Under new CEO Tim Wentworth, Walgreens began closing 60 underperforming VillageMD locations in October, even as the company doubles down on its messaging around its care delivery focus. The closures are part of a broader cost-cutting strategy as Walgreens sees profits soften along with reduced COVID-19 vaccine demand. Meanwhile, CVS brought its various care delivery assets—including Caremark, Cordavis, Minute Clinic, Oak Street Health, and Signify Health—under a new brand, CVS Carespire. The two companies were active strategic acquirers of healthcare provider assets in 2022 and 2023 but are likely to sit on the sidelines of M&A as they focus on profitability and integration for existing plays.• Trouble for agilon: agilon’s stock plummeted in November 2023 and again in January 2024 after the company revised its medical margin and EBITDA guidance downward, citing utilization 2x to 3x higher than expected in categories including specialist care and outpatient surgery. Leadership cited the lag of several months in claims data used to analyze spending trends. agilon’s LTM revenue multiple had already dipped to 0.7x as of December 31, 2023, down from a high of 5.3x in 2021 and 2.3x in 2022. For value-based care companies, this mishap underlines the importance of building robust data infrastructure to accurately track and forecast utilization across providers and shows that investors are becoming more exacting in their expectations of consistent results and a path to profitability. We have predicted that there will be at least two value-based care enabler acquisitions in 2024 as valuations fall and winners emerge in an increasingly crowded landscape. Disclaimer: Any -0 values are negative values that have been rounded up to 0.The full Excel data pack including forward-looking estimates is available to PitchBook clients.ContentsK...
