ASTH · Astrana Health
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $39.01
Note written ·
Price against the kill line
18.5% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $39.01, on record since 11 November 2026. The shares are down 20.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $39.01, the close of 5 November 2026 before the third-quarter results, which would show the shares recovering the whole post-earnings drop and leading again. Fourth-quarter adjusted EBITDA above the $61.5 million top of the guided range would also show that.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Net income, latest quarter ($M)
- 13.0
- Net income, four quarters ($M)
- 53.1
- Shareholders' equity ($M)
- 857
- Price to earnings (×)
- 33.4
- Price to book value (×)
- 2.1
- Revenue, latest quarter ($M)
- 1,024
- Revenue, change on a year (%)
- +7.1
- Market value ($M)
- 1,774
Astrana Health is an insurer: net cash, enterprise value and free cash flow are not shown, because a bank's or insurer's cash and investments back its deposits and policies.
All filed numbers
What Astrana Health reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 1,024 | +7.1 | 12.1 | 3.9 |
| first filed | 973 | +48.5 | 10.7 | 3.5 |
| first filed | 965 | +55.6 | 11.0 | 3.0 |
| first filed | 951 | +42.9 | 10.0 | 1.9 |
| first filed | 956 | +99.7 | 10.2 | 2.0 |
| first filed | 655 | +34.7 | 11.9 | 3.1 |
| Pre-tax income ($M) | 32.2 |
| Net income ($M) four quarters: 53.1 | 13.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.9 |
| Operating cash flow ($M) | 114 |
| Capital spending ($M) | 14.8 |
| Free cash flow ($M) | Not meaningful |
Not meaningful: a bank's or insurer's operating cash flow moves with its deposits, loans and policy reserves, so it is not cash free for its owners.
| Cash and short-term investments ($M) | 396 |
| Debt ($M) non-current long-term debt plus current maturities | 925 |
| Net cash, cash less debt ($M) | Not meaningful |
| Deferred revenue ($M) at 31 December 2025, filed 12 March 2026; +65.6% on a year | 2.7 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 531 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 857 |
Not meaningful: a bank's or insurer's cash and investments back its deposits and policies.
| Market value ($M) | 1,774 |
| Enterprise value, market value plus net debt ($M) | Not meaningful |
| Enterprise value to sales (×) | Not meaningful |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | 33.4 |
| Price to book value (×) | 2.1 |
| Free-cash-flow yield (%) | Not meaningful |
Not meaningful: a bank's or insurer's cash and investments back its deposits and policies.
Not meaningful: a bank's or insurer's operating cash flow moves with its deposits, loans and policy reserves, so it is not cash free for its owners.
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 5.4% of shares outstanding sold short, 8.8 days of average trading to cover, −2.5% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $0 |
The thesis
Astrana Health shares are more likely to lag the S&P 500 over the next three months. The company guided fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to $48.5–61.5 million, against $77.2 million in the third quarter, and said Medicaid medical costs are running above its assumptions. New Medicare Advantage contracts starting 1 January 2027 and the fourth-quarter report with 2027 guidance decide whether that reading holds.
Astrana reported third-quarter results on 5 November 2026. Revenue was $1.023 billion against a $1.020 billion estimate, and diluted earnings per share (EPS) were $0.26 against a $0.45 estimate, according to Benzinga. Adjusted EBITDA of $77.2 million sat near the top of the $72.5–77.5 million guided range, according to Finviz coverage of the release.
The shares closed at $31.77 on 12 November 2026, down 22.2% over three months and below both the 50-day average of $36.53 and the 200-day average of $34.26. The market has already marked the shares down for the light fourth-quarter guide and the Medicaid cost comment. Needham's price target of $45, reiterated with a Buy rating on 6 November 2026, remains well above the close.
Bullish and bearish views on Astrana Health Inc.
The bull case on Astrana Health Inc. (ASTH), in brief: third quarter cleared the company's own minimums. The bear case: fourth-quarter outlook came in light.
Bull case
- Third quarter cleared the company's own minimums. Revenue of $1.023 billion topped the $1.000 billion minimum set on 6 August 2026, and adjusted EBITDA of $77.2 million topped the $72.5 million minimum (Benzinga and Finviz, 5 November 2026).
- Full-year profit midpoints held. Finviz reported that the narrowed 2026 ranges kept their midpoints on 5 November 2026: revenue of $3.9–4.0 billion (from $3.8–4.1 billion), adjusted EBITDA of $261–274 million and free cash flow of $107.5–130 million.
- Sell-side support survived the drop. Needham maintained Buy and raised its price target to $45 on 6 November 2026, the day after results.
- New care contracts start in 2027. Finviz reported Medicare Advantage partnerships effective January 2027, including Alignment Healthcare, and a closed Georgia independent-practice-association acquisition (5 November 2026).
Bear case
- Fourth-quarter outlook came in light. Astrana guided fourth-quarter revenue of $939 million to $1.039 billion against a $1.034 billion estimate, and adjusted EBITDA of $48.5–61.5 million (Benzinga and Finviz, 5 November 2026). Coverage described one-time third-quarter items, including Medicare Advantage risk-adjustment and shared-savings accruals, that are not expected to recur.
- Medicaid costs run above plan. Management said Medicaid medical-cost trend "is now running above assumptions" and assumes Medicaid membership falls a further 10–15% in 2027 (Finviz, 5 November 2026).
- Reported earnings missed. Third-quarter diluted EPS of $0.26 was below the $0.45 estimate (Benzinga, 5 November 2026). Glass House Research, which disclosed a short position on 17 September 2026, questioned reserves, acquisition accounting, receivables and adjusted earnings.
- Cyber and debt overhangs remain. A Form 8-K filed 23 September 2026 under Item 1.05 described a data-access incident as material. Long-term debt, net, was $882.7 million against $400.8 million of cash at 30 June 2026.
Price setup
The shares closed at $34.50 on 6 November 2026, the session after results, then at $33.77 on 9 November 2026, $32.18 on 10 November 2026, $32.94 on 11 November 2026 and $31.77 on 12 November 2026. The 3-month reference close was $40.81 on 14 August 2026.
The 52-week high is $51.60, reached intraday on 2 July 2026. The last close is 38.4% below it. The 52-week closing low is $18.16 on 12 February 2026.
The 50-day average of $36.53 remains above the 200-day average of $34.26, and the last close sits under both. A recovery would have to reclaim the close of 5 November 2026, the session before results, which is the level the kill line tests.
SEC Form 4 filings from 1 September to 13 October 2026 show officers' shares withheld for tax and one director's disposition to the company. None is an open-market sale.
Catalysts ahead
- 1 January 2027: New Medicare Advantage partnerships, including Alignment Healthcare, take effect. Tests whether new contracts can offset the 10–15% Medicaid membership decline management assumes for 2027.
- ~2 March 2027 (est.): Fourth-quarter 2026 results with 2027 guidance; the 2025 fourth-quarter results came on 2 March 2026. Shows whether fourth-quarter adjusted EBITDA lands inside the $48.5–61.5 million guide and whether 2027 guidance supports management's mid-teens growth ambition.
What would change the view
A daily close above $39.01, the close of 5 November 2026 before the third-quarter results, which would show the shares recovering the whole post-earnings drop and leading again. Fourth-quarter adjusted EBITDA above the $61.5 million top of the guided range would also show that.
What it trades with
Astrana is a risk-bearing medical group and health-plan operator. Its results track Medicaid and Medicare Advantage medical-cost trends, so reports from large Medicare Advantage insurers and other value-based-care providers are the closest read-through. Alignment Healthcare is a named Medicare Advantage partner from January 2027.
Since September the shares have moved on company events (the short report, the cyber filing, the earnings outlook) more than on market direction.
The evidence, claim by claim (7)
- Third-quarter 2026 revenue was $1.023 billion against a $1.020 billion estimate; diluted EPS was $0.26 against a $0.45 estimate. Benzinga, 5 November 2026 · as of
- Third-quarter 2026 adjusted EBITDA was $77.2 million, near the top of the $72.5–77.5 million guided range. Finviz coverage of the third-quarter 2026 results release · as of
- 2026 revenue guidance narrowed to $3.9–4.0 billion from $3.8–4.1 billion; adjusted EBITDA guidance is $261–274 million; free cash flow guidance is $107.5–130 million. Finviz and Benzinga, 5 November 2026 · as of
- Fourth-quarter 2026 revenue guidance is $939 million to $1.039 billion against a $1.034 billion estimate; fourth-quarter adjusted EBITDA guidance is $48.5–61.5 million. Benzinga and Finviz, 5 November 2026 · as of
- Management said Medicaid medical-cost trend is running above assumptions and assumes a further 10–15% Medicaid membership decline in 2027. Finviz, third-quarter 2026 earnings coverage · as of
- Needham maintained Buy and raised its price target to $45. Needham, reported 6 November 2026 · as of
- Glass House Research disclosed a short position and questioned reserves, acquisition accounting, receivables and adjusted earnings. Benzinga, 17 September 2026 · as of
Sources
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