Why Health Management Company P3 Health Partners Shares Are Up Today

P3 Health Partners Inc PIII shares are trading higher by around 10% after the company reaffirmed guidance for 2023 and announced the 2024 outlook.

FY24 Outlook: PIII expects revenue of $1.45 billion to $1.55 billion (vs. consensus $1.41 billion) and Adjusted EBITDA of $20 million to $40 million.

The company anticipated Medicare Advantage Members of 125,000- 135,000, Medical Margin of $230 million-$250 million and Medical Margin PMPM of $165-$175.

FY23 Outlook: The company reiterated guidance for revenue of $1.2 billion-$1.25 billion (vs. consensus $1.22 billion) and Medicare Advantage Members of 115,000-120,000.

PIII continues to expect Medical Margin of $155 million-$175 million, Medical Margin PMPM of $120-$130 and Adjusted EBITDA loss of $(50) million to $(30) million.

"We made significant strides in 2023 and expect to achieve meaningful profitability in 2024, an important milestone for the company. We have a robust pipeline of strategic partnerships that will drive growth and further validate the P3 business model. And our business continues to gain momentum across all key performance metrics including managing medical cost trend," said Dr. Sherif Abdou, co-founder and CEO.

William Blair analyst Ryan Daniels sees the organic growth outlook at PIII as one of the strongest in their healthcare services coverage universe (with management continuing to target 35% growth, per annum, over the next five years).

Also, the analyst expects the company’s positive macro tailwinds, myriad growth drivers, and scalable and capital-light business model to drive top and bottom-line expansion going forward. 

Daniels estimates sales and Adjusted EBITDA of $1.23 billion and $(43.8) million in FY23 and $354.8 million and $27.4 million in FY24, respectively. The analyst reiterated the Outperform rating.

Price Action: PII shares are up 11.1% at $1.50 premarket on the last check Wednesday.