Astrana Health’s first quarter results for 2025 were met with a negative market reaction, with revenue growth driven by its Care Partners segment and progress in full-risk contracts. However, management acknowledged that the quarter’s performance was tempered by lower-than-expected revenue and compressed operating margins. CEO Brandon Sim pointed to the flu season and higher emergency room and lab utilization in Medicaid as factors impacting costs, while also highlighting ongoing investments in technology and integration. Sim stated, “Margins were moderated by planned ongoing investments in growth integration technology, as well as by revenue growth in areas with lower near-term margin profiles.”

Is now the time to buy ASTH? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Astrana Health’s Q1 Earnings Call

• Ryan Daniels (William Blair) asked about remaining milestones for CHS integration. CEO Brandon Sim explained integration is complete, but further implementation of the care model should drive margin improvements over time.
• Michael Ha (Baird) pressed on the seasonality and drivers behind the lighter revenue outlook for next quarter. Sim attributed this to Medicaid volatility and full-risk conversions being weighted toward the second half of the year.
• Jack Slevin (Jefferies) questioned Astrana’s confidence in leveraging favorable Medicare Advantage rates. Sim responded that while the rate update was anticipated, its exact financial impact will become clearer as more details emerge.
• Jailendra Singh (Truist Securities) asked about profitability in the ACO REACH program and the impact of recent risk adjustment changes. Sim shared that the company absorbed a modest drag from retroactive adjustments, offset by other risk-management strategies.
• Brooks O’Neil (Lake Street Capital Markets) probed on organizational stress from rapid growth and integration. Sim acknowledged the challenges of scaling rapidly, emphasizing ongoing focus on integration and cultural cohesion.

Catalysts in Upcoming Quarters

In the upcoming quarters, the StockStory team will be monitoring (1) the pace and effectiveness of integrating Prospect Health and realizing promised synergies, (2) the continued conversion of members to full-risk contracts and resulting margin trends, and (3) the outcome of Medicaid contract renewals and regulatory developments in key states. Progress in leadership-driven data and technology initiatives will also be a key signpost for sustainable growth.

Astrana Health currently trades at $24.73, down from $33.40 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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