Privia Health (PRVA)

Healthcare tech company Privia Health Group (NASDAQ:PRVA) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 17.4% year on year to $541.2 million. The company’s full-year revenue guidance of $2.4 billion at the midpoint came in 3.7% above analysts’ estimates. Its non-GAAP profit of $0.25 per share was 30.2% above analysts’ consensus estimates.

Company Overview

Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ:PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.

The healthcare technology sector provides software and data analytics to help hospitals and clinics streamline operations and improve patient outcomes, often through value-based care models. Future growth is expected as providers prioritize digital transformation to manage rising costs and patient demands. Tailwinds include the adoption of AI-driven tools and government incentives for digitization. There challenges as well, including long sales cycles and slow adoption by providers, who may be resistance to change. Tightening hospital budgets and cybersecurity threats are additional risks that could slow adoption.

Privia Health's competitors include Agilon Health (NYSE: AGL), Oak Street Health (acquired by CVS Health), VillageMD (majority-owned by Walgreens Boots Alliance), and Aledade, along with traditional physician practice management companies and health system-affiliated physician networks.

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With just $2.12 billion in revenue over the past 12 months, Privia Health lacks scale in an industry where it matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive.

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Privia Health grew its sales at an excellent 21% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Privia Health’s annualized revenue growth of 13.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can better understand the company’s revenue dynamics by analyzing its number of implemented providers, which reached 5,380 in the latest quarter. Over the last two years, Privia Health’s implemented providers averaged 12.4% year-on-year growth. Because this number is in line with its sales growth, we can see the company’s underlying demand was fairly consistent.

This quarter, Privia Health reported year-on-year revenue growth of 17.4%, and its $541.2 million of revenue exceeded Wall Street’s estimates by 4.8%.

Looking ahead, sell-side analysts expect revenue to grow 8% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is above the sector average and indicates the market is baking in some success for its newer products and services.

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

Although Privia Health was profitable this quarter from an operational perspective, it’s generally struggled over a longer time period. Its expensive cost structure has contributed to an average operating margin of negative 2.1% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, Privia Health’s operating margin rose by 24.1 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to show consistent profitability.

This quarter, Privia Health generated an operating margin profit margin of 2.1%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Privia Health’s full-year EPS flipped from negative to positive over the last four years. This is encouraging and shows it’s at a critical moment in its life.

In Q4, Privia Health reported adjusted EPS of $0.25, up from $0.21 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Privia Health’s full-year EPS of $1 to grow 1.6%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Privia Health has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 5.8% over the last five years, slightly better than the broader healthcare sector.

Taking a step back, we can see that Privia Health’s margin expanded by 2.1 percentage points during that time. This is encouraging because it gives the company more optionality.

Privia Health’s free cash flow clocked in at $127.5 million in Q4, equivalent to a 23.6% margin. This result was good as its margin was 7.3 percentage points higher than in the same quarter last year, building on its favorable historical trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Privia Health’s four-year average ROIC was negative 2.3%, meaning management lost money while trying to expand the business. Investors are likely hoping for a change soon.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Privia Health’s ROIC has increased. This is a good sign, but we recognize its lack of profitable growth during the COVID era was the primary reason for the change.

One of the best ways to mitigate bankruptcy risk is to hold more cash than debt.

Privia Health is a profitable, well-capitalized company with $479.7 million of cash and $9.53 million of debt on its balance sheet. This $470.2 million net cash position is 16.9% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

It was good to see Privia Health beat analysts’ EPS expectations this quarter. We were also glad its full-year revenue guidance trumped Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock remained flat at $22.52 immediately following the results.

Updated: February 26, 2026 at 6:20 AM EST

Before deciding whether to buy Privia Health or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

Privia Health isn’t a bad business, but we’re not clamoring to buy it here and now. First off, its revenue growth was impressive over the last five years. And while Privia Health’s relatively low ROIC suggests management has struggled to find compelling investment opportunities, its expanding operating margin shows the business has become more efficient.

Privia Health’s P/E ratio based on the next 12 months is 22.3x. This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $31.25 on the company (compared to the current share price of $22.52).