Value
6.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 0.1 |
| Fwd P/E | 8.2 |
| PEG | 10.0 |
| Analyst target | 6.0 |
- ▸Forward P/E: 14.5x
- ▸PEG: 0.13
EVH · Why this verdict
Why Evolent Health (EVH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Evolent Health is in an early technical recovery from a deep drawdown, but a quality-floor breach, a negative asymmetry gate after already hitting its target, and an inconsistent earnings history keep the setup on exit watch.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality has breached the engine's minimum floor at 1.6 out of 10 against the 4.0 threshold, with zero recorded ROE, ROA, and margins across the board, triggering an exit recommendation. Warnings | Quality score should remain below the 4.0 floor as long as core profitability metrics stay at zero. | ↑Improving |
| CounterEvolent has been working through a restructuring and cost-cutting phase in health information services, and temporary margin compression during a turnaround shouldn't be conflated with permanent business impairment. | ||
The stock has already reached and moved past its analyst-target-derived upside, with the model flagging -10.3% versus target and the asymmetry gate failing at -0.69 as a result. Warnings | The asymmetry ratio should stay negative as long as the stock trades above its modeled fair value. | ↑Improving |
| CounterWith the stock down 53% from its 52-week high already, further re-rating lower could be limited, and any positive catalyst could quickly reopen upside versus a currently depressed target. | ||
The stock is classified as speculative following a steep 53% drawdown from its 52-week high, with the current setup flagged as a recovery: a death cross present but MACD improving. Suitability rationale | MACD improvement should continue and momentum should climb back above the 5.5 gate threshold if the recovery is genuine. | →Stable |
| CounterDeep-drawdown recovery setups can just as easily be brief rebounds within a larger downtrend, especially when the underlying quality score is this weak. | ||
Evolent has split its last 4 quarters evenly between beats and misses, with an average surprise of -38.7%, reflecting an inconsistent earnings track record consistent with the catalyst dimension's earnings concerns. Earnings | The beat/miss ratio should improve toward at least 3 of the next 4 quarters beating estimates. | ↑Improving |
| CounterA large negative average surprise driven by a couple of severe misses, rather than many small ones, could reflect one-time charges tied to the ongoing business restructuring rather than a structurally deteriorating operating trend. | ||
Short interest stands at an elevated 13% of float, a key risk flagged by the engine, alongside high implied volatility of 97%. Key risks | Short interest should decline below 8% if bearish positioning unwinds. | ↑Improving |
| CounterElevated short interest combined with a stock already down 53% and showing early recovery signs raises the possibility of a short squeeze, which would work against the bearish thesis rather than confirm it. | ||
Quality has breached the engine's minimum floor at 1.6 out of 10 against the 4.0 threshold, with zero recorded ROE, ROA, and margins across the board, triggering an exit recommendation.
↑ImprovingWarnings
- Expectation
- Quality score should remain below the 4.0 floor as long as core profitability metrics stay at zero.
CounterEvolent has been working through a restructuring and cost-cutting phase in health information services, and temporary margin compression during a turnaround shouldn't be conflated with permanent business impairment.
The stock has already reached and moved past its analyst-target-derived upside, with the model flagging -10.3% versus target and the asymmetry gate failing at -0.69 as a result.
↑ImprovingWarnings
- Expectation
- The asymmetry ratio should stay negative as long as the stock trades above its modeled fair value.
CounterWith the stock down 53% from its 52-week high already, further re-rating lower could be limited, and any positive catalyst could quickly reopen upside versus a currently depressed target.
The stock is classified as speculative following a steep 53% drawdown from its 52-week high, with the current setup flagged as a recovery: a death cross present but MACD improving.
→StableSuitability rationale
- Expectation
- MACD improvement should continue and momentum should climb back above the 5.5 gate threshold if the recovery is genuine.
CounterDeep-drawdown recovery setups can just as easily be brief rebounds within a larger downtrend, especially when the underlying quality score is this weak.
Evolent has split its last 4 quarters evenly between beats and misses, with an average surprise of -38.7%, reflecting an inconsistent earnings track record consistent with the catalyst dimension's earnings concerns.
↑ImprovingEarnings
- Expectation
- The beat/miss ratio should improve toward at least 3 of the next 4 quarters beating estimates.
CounterA large negative average surprise driven by a couple of severe misses, rather than many small ones, could reflect one-time charges tied to the ongoing business restructuring rather than a structurally deteriorating operating trend.
Short interest stands at an elevated 13% of float, a key risk flagged by the engine, alongside high implied volatility of 97%.
↑ImprovingKey risks
- Expectation
- Short interest should decline below 8% if bearish positioning unwinds.
CounterElevated short interest combined with a stock already down 53% and showing early recovery signs raises the possibility of a short squeeze, which would work against the bearish thesis rather than confirm it.
Per-dimension breakdown
Quality
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 5.0 |
| Moat | 3.1 |
| Piotroski F | 4.4 |
- ▸No competitive moat
- ▸Quality concerns
Growth
6.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.1 |
| EPS growth | 10.0 |
Momentum
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.1 |
| MACD | 1.4 |
| OBV | 1.0 |
| MA position | 3.0 |
| Volume | 4.9 |
- ▸Uptrend pullback (RSI 34) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.8 |
| Analyst rating | 7.2 |
| Price target | 8.2 |
- ▸Analyst upside: 25%
Insider
6.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.1 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.6 |
| quality rank | 1.3 |
| growth rank | 2.1 |
Technical
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.6 |
| 52w position | 0.0 |
| gap | 7.0 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.9 |
| days to cover | 4.4 |
| volatility | 0.0 |
| put call | 6.7 |
| implied vol | 0.0 |
| beta | 8.4 |
| debt equity | 2.5 |
| news risk | 6.0 |
- ▸High IV: 99%
Catalyst
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| news activity | 6.0 |
- ▸Earnings concerns: 2B/2M
- ▸Earnings in 13 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.60
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.7<4.5
- ASYMMETRY:0.6<1.5@spot
Warning (1)
- EARNINGS_PROXIMITY:13d<=14d (soft)
Reward-to-Risk
0.58
Upside
+8.7%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -60% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 3.7<4.5 outcome against Value at 6.9 and asymmetric R:R of 0.58.
The strongest dimensions are Value at 6.9, Sentiment at 6.7, and Technical at 6.7; the weakest are Quality at 1.6, Peer rank at 3.5, and Catalyst at 3.6. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.58 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Floor Breach
Trip ifQuality score rises above 4.0 from the current 1.6, clearing the floor.
- P2Negative Asymmetry Target Reached
Trip ifAsymmetry ratio rises above 0.5 from the current -0.69.
- P3Deep Drawdown Recovery Setup
Trip ifMomentum score falls below 4.5 from the current 5.4, reversing the recovery.
- P4Inconsistent Earnings History
Trip ifAverage earnings surprise falls below -50% over the next 4 reported quarters.
- P5Elevated Short Interest
Trip ifShort interest rises above 20% of float from the current 13%.