What Happened?
Shares of healthcare services company Agilon Health (NYSE: AGL) fell 2% in the afternoon session after the release of a key inflation report revealed prices paid to U.S. producers rose more than anticipated in January.
The Producer Price Index (PPI), which measures inflation before it reaches consumers, increased by 0.5% last month, surpassing economists' forecasts of a 0.3% rise. This report, indicating persistent inflationary pressures within the economy, sparked concerns among investors. The data suggests that the Federal Reserve might delay potential interest rate cuts that the market had been anticipating. The prospect of higher interest rates for a longer period can negatively affect corporate valuations and borrowing costs, leading to a broad market downturn that is impacting various sectors, including healthcare and medical devices.
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What Is The Market Telling Us
agilon health’s shares are extremely volatile and have had 82 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock gained 18% on the news that the company's fourth-quarter 2025 results showed a mix of positives and negatives that ultimately pleased investors. The healthcare services company reported revenue of $1.57 billion, which grew 3.1% year-over-year and beat Wall Street's expectations. Adding to the good news, the company provided optimistic EBITDA guidance for the upcoming quarter that surpassed analyst forecasts. However, the results were not entirely positive. Agilon reported a GAAP loss of $0.46 per share, missing consensus estimates by a wide margin. Furthermore, its revenue guidance for the first quarter of 2026 came in at $1.37 billion, falling short of analysts' projections. Despite the earnings miss and weak near-term sales outlook, investors appeared to focus on the strong revenue beat in the reported quarter and the encouraging profitability forecast, signaling confidence in the company's direction.
agilon health is down 12% since the beginning of the year, and at $0.59 per share, it is trading 89.6% below its 52-week high of $5.68 from April 2025. Investors who bought $1,000 worth of agilon health’s shares at the IPO in April 2021 would now be looking at an investment worth $19.13.
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