Privia Health Stock Jumps on Strong Medicare Savings Report
Company raises 2025 earnings forecast after its physician networks generate $233 million in savings, a 32% annual increase.
Shares of Privia Health Group (PRVA) climbed in recent trading after the physician enablement company announced its affiliated medical groups generated over $233 million in savings for the Medicare program in 2024, marking a 32% increase from the previous year. The strong performance prompted the Arlington, Virginia-based company to raise its adjusted earnings guidance for the full-year 2025.
The savings were achieved through Privia’s network of Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP), a value-based care initiative that rewards providers for delivering high-quality, cost-effective care. The company’s nine ACOs, which collectively manage the care of nearly 195,000 Medicare beneficiaries, achieved an aggregate savings rate of 9.3%, well above the average for similar programs.
"Our strong performance in the 2024 Medicare Shared Savings Program underscores the effectiveness of our physician-led approach," said Dr. Bartley Bryt, Chief Medical Officer of Privia Health. "By putting physicians in the driver’s seat and equipping them with essential tools and technology, we are effectively managing the total cost of care, leading to improved outcomes for nearly 195,000 Medicare beneficiaries and significant shared savings."
Based on these results, Privia has increased its full-year 2025 Adjusted EBITDA guidance to a range of $113 million to $116 million. This positive forecast builds on an already bullish sentiment from Wall Street. The consensus among analysts is a “Moderate Buy” to “Strong Buy” on the stock, with an average 12-month price target suggesting a significant upside from its current trading levels. The latest results are likely to reinforce that positive outlook.
Privia's model focuses on empowering physicians with data analytics and technology to better manage patient health and reduce unnecessary healthcare spending. The company's 2024 results showed significant outperformance compared to national benchmarks, with inpatient spending 13% lower than the median for ACOs and emergency department visits 17% lower. This data highlights the effectiveness of the company's strategy in a healthcare system increasingly focused on controlling costs.
Since 2014, Privia’s network has delivered over $1.5 billion in total shared savings across various government and commercial health plans. The consistent success in generating savings and improving care quality positions Privia Health as a key player in the ongoing shift from traditional fee-for-service healthcare to value-based payment models.