GET DAILY SIGNALSagilon health (AGL) Delivers Q3 Turnaround to Profitability with Sharper Cost Controls
Key Takeaways
- agilon health reported third quarter 2026 revenue of $1.52 billion, up 5.9% year over year and ahead of the roughly $1.46 billion consensus estimate.
- The company swung to a GAAP profit of $1.97 per diluted share, with net income of $35 million, compared with a net loss of $110 million in the prior-year quarter.
- The medical services expense ratio (MSER), which measures direct medical costs as a share of medical services revenue, improved to 88.5% from 104.0% a year earlier.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose to $64 million, versus negative $91 million in the year-ago period.
- Management raised full-year 2026 guidance, lifting adjusted EBITDA to a range of $145 million to $155 million, up from $75 million to $95 million previously.
- Total members on the platform declined 8% to 566,000, reflecting a deliberate focus on profitability over growth.
Why These Results Matter for the Business Model
agilon health works with independent primary care groups to move senior care toward value-based, risk-bearing arrangements, mainly through Medicare Advantage. Profitability depends on keeping medical costs in check within fixed per-member payments, which makes the MSER the clearest indicator for investors to watch. After several quarters of losses from rising medical costs, the third quarter of 2026 offers a key test of whether cost discipline and contracting improvements can support lasting profits. With revenue growth slowing and membership down, attention has shifted from scale to whether the company can improve earnings per member while preserving longer-term potential.
Quarterly Results in Detail
For the third quarter ended September 30, 2026, AGL posted total revenue of $1.52 billion, a 5.9% rise from $1.44 billion a year earlier and above the consensus estimate of about $1.46 billion. GAAP net income reached $35 million, or $1.97 per diluted share, a strong reversal from the $110 million net loss in the same quarter last year and well above analyst forecasts for a loss.
The standout operational gain came from the MSER, which dropped to 88.5% from 104.0%, moving clearly below 100% and showing that care costs fell below capitated revenue collected. Adjusted EBITDA moved to $64 million from negative $91 million a year earlier. Membership contracted, with total members down 8% to 566,000, including 454,000 Medicare Advantage members (down 10%) and 112,000 ACO beneficiaries.
Management also lifted full-year 2026 guidance to adjusted EBITDA of $145 million to $155 million, revenue of $5.87 billion to $5.89 billion, and an MSER of 90.3% to 90.5%.
Market Response to the Earnings Release
Investors reacted positively to the results, with the stock moving higher right after the release as the market absorbed the shift to profitability and the raised full-year outlook. The clear MSER improvement and adjusted EBITDA jump directly addressed the main valuation concern around whether the value-based care approach could deliver steady profits. The earnings beat was sizable versus consensus, though the 8% membership drop shows that margin progress is occurring on a smaller base for now. Management described the decline as intentional, linked to disciplined contracting and prior market exits, which helped support a measured positive response.
What to Watch Going Forward
After this report, the focus will turn to whether the margin gains hold up. Management noted that part of the MSER improvement stemmed from favorable claims development in the first half of 2026, a factor that may not repeat fully. Future quarters will clarify if the better cost trends are lasting or partly temporary.
Membership trends stay important. The company expects ACO membership to rise roughly 40% to 50% in 2027, mainly via the Medicare Shared Savings Program, which could support growth while limiting immediate medical cost exposure. The pace and economics of those additions will influence the revenue picture.
Finally, 2027 payer contracting is in progress and covers about half the business. The terms secured, combined with medical cost trends and risk-adjustment results, will shape both the MSER and adjusted EBITDA path ahead.
Using AI Tools in My Research Process
I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry. It helped surface comparable names quickly and confirm the broader sector context around value-based care providers.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
AGL's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for AGL turned positive on November 04, 2026. Looking at past instances where AGL's MACD turned positive, the stock continued to rise in 39 of 45 cases over the following month. The odds of a continued upward trend are 87%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 49 of 62 cases where AGL's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 79%.
The Momentum Indicator moved above the 0 level on November 04, 2026. You may want to consider a long position or call options on AGL as a result. In 66 of 80 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 82%.
AGL moved above its 50-day moving average on November 03, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for AGL crossed bullishly above the 50-day moving average on October 26, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 10 of 13 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 77%.
Following a +11.08% 3-day Advance, the price is estimated to grow further. Considering data from situations where AGL advanced for three days, in 229 of 274 cases, the price rose further within the following month. The odds of a continued upward trend are 84%.
The Aroon Indicator entered an Uptrend today. In 156 of 183 cases where AGL Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 85%.
Bearish Trend Analysis
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AGL declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 87%.
AGL broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 18 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 23 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (7.102) is normal, around the industry mean (204.059). P/E Ratio (-6.801) is within average values for comparable stocks, (18.581). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.498). Dividend Yield (0.000) settles around the average of (0.091) among similar stocks. P/S Ratio (0.253) is also within normal values, averaging (2.688).
The Tickeron Price Growth Rating for this company is 34 (best 1 - 100 worst), indicating steady price growth. AGL’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 98 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. AGL’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 82, placing this stock worse than average.
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