Evolent Health Bonds

EVH Stock  USD 32.73  0.60  1.87%   
Evolent Health holds a debt-to-equity ratio of 0.557. As of now, Evolent Health's Debt Equity Ratio is increasing as compared to previous years. The Evolent Health's current Cash Flow To Debt Ratio is estimated to increase to 0.23, while Short and Long Term Debt Total is projected to decrease to under 356.5 M. Evolent Health's financial risk is the risk to Evolent Health stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).

Asset vs Debt

Equity vs Debt

Evolent Health's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Evolent Health's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the Company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Evolent Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Evolent Health's stakeholders.
For most companies, including Evolent Health, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Evolent Health the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Price Book
3.4273
Book Value
9.375
Operating Margin
0.0123
Profit Margin
(0.06)
Return On Assets
0.0086
Given that Evolent Health's debt-to-equity ratio measures a Company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Evolent Health is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Evolent Health to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Evolent Health is said to be less leveraged. If creditors hold a majority of Evolent Health's assets, the Company is said to be highly leveraged.
As of now, Evolent Health's Debt Equity Ratio is increasing as compared to previous years. The Evolent Health's current Cash Flow To Debt Ratio is estimated to increase to 0.23, while Short and Long Term Debt Total is projected to decrease to under 356.5 M.
  
Check out the analysis of Evolent Health Fundamentals Over Time.
For more detail on how to invest in Evolent Stock please use our How to Invest in Evolent Health guide.

Evolent Health Bond Ratings

Evolent Health bond ratings play a critical role in determining how much Evolent Health have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Evolent Health's borrowing costs.
Piotroski F Score
3  Frail
Beneish M Score

Evolent Health Debt to Cash Allocation

As Evolent Health follows its natural business cycle, the capital allocation decisions will not magically go away. Evolent Health's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company has 644.8 M in debt with debt to equity (D/E) ratio of 0.56, which is OK given its current industry classification. Evolent Health has a current ratio of 1.01, demonstrating that it is not liquid enough and may have problems paying out its financial commitments when the payables are due. Debt can assist Evolent Health until it has trouble settling it off, either with new capital or with free cash flow. So, Evolent Health's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Evolent Health sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Evolent to invest in growth at high rates of return. When we think about Evolent Health's use of debt, we should always consider it together with cash and equity.

Evolent Health Total Assets Over Time

Evolent Health Assets Financed by Debt

Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Evolent Health's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Evolent Health, which in turn will lower the firm's financial flexibility. Like all other financial ratios, a an Evolent Health debt ratio should be compared their industry average or other competing firms.

Evolent Health Corporate Bonds Issued

Evolent Health issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Evolent Health uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Evolent bonds can be classified according to their maturity, which is the date when Evolent Health has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.

Evolent Net Debt

Net Debt

474.57 Million

As of now, Evolent Health's Net Debt is increasing as compared to previous years.

Understaning Evolent Health Use of Financial Leverage

Evolent Health financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Evolent Health's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Evolent Health assets, the company is considered highly leveraged. Understanding the composition and structure of overall Evolent Health debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it. Financial leverage can amplify the potential profits to Evolent Health's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Evolent Health's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets).
Last ReportedProjected for 2024
Net Debt452 M474.6 M
Short Term Debt9.7 M17.2 M
Long Term Debt597 M626.9 M
Short and Long Term Debt Total644.8 M356.5 M
Long Term Debt Total474.9 M259 M
Short and Long Term Debt23.9 M22.7 M
Long Term Debt To Capitalization 0.37  0.21 
Total Debt To Capitalization 0.38  0.20 
Debt Equity Ratio 0.60  0.63 
Debt Ratio 0.24  0.14 
Cash Flow To Debt Ratio 0.22  0.23 
Please read more on our technical analysis page.

Evolent Health Investors Sentiment

The influence of Evolent Health's investor sentiment on the probability of its price appreciation or decline could be a good factor in your decision-making process regarding taking a position in Evolent. The overall investor sentiment generally increases the direction of a stock movement in a one-year investment horizon. However, the impact of investor sentiment on the entire stock market does not have solid backing from leading economists and market statisticians.
Investor biases related to Evolent Health's public news can be used to forecast risks associated with an investment in Evolent. The trend in average sentiment can be used to explain how an investor holding Evolent can time the market purely based on public headlines and social activities around Evolent Health. Please note that most equities that are difficult to arbitrage are affected by market sentiment the most.
Evolent Health's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Evolent Health's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Evolent Health's news discussions. The higher the estimated score, the more favorable is the investor's outlook on Evolent Health.
Some investors attempt to determine whether the market's mood is bullish or bearish by monitoring changes in market sentiment. Unlike more traditional methods such as technical analysis, investor sentiment usually refers to the aggregate attitude towards Evolent Health in the overall investment community. So, suppose investors can accurately measure the market's sentiment. In that case, they can use it for their benefit. For example, some tools to gauge market sentiment could be utilized using contrarian indexes, Evolent Health's short interest history, or implied volatility extrapolated from Evolent Health options trading.

Pair Trading with Evolent Health

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Evolent Health position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Evolent Health will appreciate offsetting losses from the drop in the long position's value.

Moving against Evolent Stock

  0.59TFX Teleflex Incorporated Financial Report 2nd of May 2024 PairCorr
  0.54SSY SunLink Health SystemsPairCorr
  0.49MMSI Merit Medical Systems Financial Report 24th of April 2024 PairCorr
  0.47AHG Akso Health GroupPairCorr
The ability to find closely correlated positions to Evolent Health could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Evolent Health when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Evolent Health - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Evolent Health to buy it.
The correlation of Evolent Health is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Evolent Health moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Evolent Health moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Evolent Health can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
When determining whether Evolent Health offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Evolent Health's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Evolent Health Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Evolent Health Stock:
Check out the analysis of Evolent Health Fundamentals Over Time.
For more detail on how to invest in Evolent Stock please use our How to Invest in Evolent Health guide.
You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

Complementary Tools for Evolent Stock analysis

When running Evolent Health's price analysis, check to measure Evolent Health's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Evolent Health is operating at the current time. Most of Evolent Health's value examination focuses on studying past and present price action to predict the probability of Evolent Health's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Evolent Health's price. Additionally, you may evaluate how the addition of Evolent Health to your portfolios can decrease your overall portfolio volatility.
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Is Evolent Health's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Evolent Health. If investors know Evolent will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Evolent Health listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share
(1.28)
Revenue Per Share
17.653
Quarterly Revenue Growth
0.454
Return On Assets
0.0086
Return On Equity
(0.11)
The market value of Evolent Health is measured differently than its book value, which is the value of Evolent that is recorded on the company's balance sheet. Investors also form their own opinion of Evolent Health's value that differs from its market value or its book value, called intrinsic value, which is Evolent Health's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Evolent Health's market value can be influenced by many factors that don't directly affect Evolent Health's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Evolent Health's value and its price as these two are different measures arrived at by different means. Investors typically determine if Evolent Health is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Evolent Health's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

What is Financial Leverage?

Financial leverage is the use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new asset will exceed the cost of borrowing. In most cases, the debt provider will limit how much risk it is ready to take and indicate a limit on the extent of the leverage it will allow. In the case of asset-backed lending, the financial provider uses the assets as collateral until the borrower repays the loan. In the case of a cash flow loan, the general creditworthiness of the company is used to back the loan. The concept of leverage is common in the business world. It is mostly used to boost the returns on equity capital of a company, especially when the business is unable to increase its operating efficiency and returns on total investment. Because earnings on borrowing are higher than the interest payable on debt, the company's total earnings will increase, ultimately boosting stockholders' profits.

Leverage and Capital Costs

The debt to equity ratio plays a role in the working average cost of capital (WACC). The overall interest on debt represents the break-even point that must be obtained to profitability in a given venture. Thus, WACC is essentially the average interest an organization owes on the capital it has borrowed for leverage. Let's say equity represents 60% of borrowed capital, and debt is 40%. This results in a financial leverage calculation of 40/60, or 0.6667. The organization owes 10% on all equity and 5% on all debt. That means that the weighted average cost of capital is (.4)(5) + (.6)(10) - or 8%. For every $10,000 borrowed, this organization will owe $800 in interest. Profit must be higher than 8% on the project to offset the cost of interest and justify this leverage.

Benefits of Financial Leverage

Leverage provides the following benefits for companies:
  • Leverage is an essential tool a company's management can use to make the best financing and investment decisions.
  • It provides a variety of financing sources by which the firm can achieve its target earnings.
  • Leverage is also an essential technique in investing as it helps companies set a threshold for the expansion of business operations. For example, it can be used to recommend restrictions on business expansion once the projected return on additional investment is lower than the cost of debt.
By borrowing funds, the firm incurs a debt that must be paid. But, this debt is paid in small installments over a relatively long period of time. This frees funds for more immediate use in the stock market. For example, suppose a company can afford a new factory but will be left with negligible free cash. In that case, it may be better to finance the factory and spend the cash on hand on inputs, labor, or even hold a significant portion as a reserve against unforeseen circumstances.

The Risk of Financial Leverage

The most obvious and apparent risk of leverage is that if price changes unexpectedly, the leveraged position can lead to severe losses. For example, imagine a hedge fund seeded by $50 worth of investor money. The hedge fund borrows another $50 and buys an asset worth $100, leading to a leverage ratio of 2:1. For the investor, this is neither good nor bad -- until the asset price changes. If the asset price goes up 10 percent, the investor earns $10 on $50 of capital, a net gain of 20 percent, and is very pleased with the increased gains from the leverage. However, if the asset price crashes unexpectedly, say by 30 percent, the investor loses $30 on $50 of capital, suffering a 60 percent loss. In other words, the effect of leverage is to increase the volatility of returns and increase the effects of a price change on the asset to the bottom line while increasing the chance for profit as well.