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Astrana Health (ASTH) is surging higher after a stellar 4Q25 report that crushed EPS and revenue expectations, with adjusted EPS rocketing to $0.54 from last year's $(0.15) and revenue soaring 43% yr/yr to $950.5 mln. Adjusted EBITDA jumped 50% to $52.5 mln, highlighting the model's operating leverage amid integration and market challenges.

• The EPS and adjusted EBITDA improvements were largely driven by robust top-line growth, controlled medical costs, disciplined risk management, technology-enabled efficiencies that reduced GA as a percentage of revenue by 110 bps on an adjusted basis, and the full-quarter contribution from Prospect.
• Revenue climbed 43% yr/yr to $950.5 mln, beating estimates, primarily due to the full-quarter inclusion of Prospect and continued organic growth in the Care Partners segment.
• Membership reached about 1.6 mln in value-based care arrangements, supported by mid-single-digit Medicare Advantage membership growth and disciplined underwriting across payers and markets.
• Prospect Health integration remains on track and continues to validate the strategic rationale, with financial reporting standardized, live visibility into medical economics established, and clinical workflows aligned under the Astrana Care model during 4Q25.
• Management now expects to achieve the high end of the previously communicated $12-$15 mln in annualized synergies, with benefits rolling in over the coming quarters and contributing to 2026 EBITDA expansion.
• Q1 revenue guidance of $900-$1.0 bln is ahead of expectations at the midpoint, paired with adjusted EBITDA guidance of $60-$70 mln, indicating a strong start to the year as full-risk contracts ramp.
• FY26 revenue guidance of $3.80-$4.10 bln is essentially in line at the midpoint but still implies robust top-line growth from the 2025 base of $3.2 bln, alongside adjusted EBITDA guidance of $250-$280 mln and free cash flow of $105-$132.5 mln.
• The guidance framework embeds conservatism, including assumed declines in Medicaid and exchange enrollment, adverse selection from disenrollment, elevated medical cost trend just above 5%, losses in new cohorts, and zero contribution from the California HQAF program.
• The board increased the maximum aggregate amount under the existing share repurchase program from $50 mln to $100 mln, reinforcing confidence in intrinsic value and the durability of cash generation.

Briefing.com Analyst Insight

ASTH's rally underscores investor enthusiasm for its high-visibility, delegated-risk model, as a blowout EPS beat and 50% adjusted EBITDA growth showcase the earnings power unlocked by Prospect integration, disciplined risk progression, and AI-enabled operating leverage. The 43% revenue surge, with particularly strong growth outside California and an accelerating shift toward full-risk revenue, enhances durability and diversification while reinforcing the platform’s scalability across markets. 2026 guidance looks prudently constructed, embedding conservative assumptions on Medicaid/exchange dynamics and medical trend, yet still calling for solid top-line expansion and meaningful EBITDA growth as synergies and new cohorts mature.