11:36 AM EDT, 07/23/2024 (MT Newswires) -- Evolent Health's ( EVH ) Q2 earnings before interest, taxes, depreciation and amortization is expected to be impacted by accelerating utilization/prevalence, but the EBITDA growth has the potential to "significantly" accelerate in H2, RBC Capital Markets said Tuesday.

The brokerage expects Evolent to report Q2 adjusted earnings of $0.29 per share on revenue of $636.1 million. RBC also estimates adjusted EBITDA of $54.7 million, compared with Evolent's previously issued guidance of $48 million to $62 million.

"There've been multiple negative dynamics favoring [Evolent] bears over the last [five to six] months that we see peaking in Q2, before softening into [H2]," RBC Analyst Sean Dodge said in a note to clients.

Evolent will release its Q2 earnings results on Aug. 8.

"The triggering of the related contractual protections -- which allow [Evolent] to recoup much of the elevated Q2 costs -- coupled with a stabilizing 'Caid backdrop, should significantly accelerate [H2] EBITDA growth and help reignite interest in shares," the analyst said.

RBC said that Evolent continues to be its favorite long-term idea and that it would buy any post-Q2 weakness.

RBC has an outperform rating and a $42 price target on the company's stock.

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