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CMS guidelines 'a strong tailwind' for Evolent Health, says Oppenheimer. Oppenheimer analyst Mohan Naidu notes that CMS's new risk-based model rules confirm his expectation of a much more expedited and aggressive move to push providers toward higher double-sided risk models. The draft lays a path for ACOs to 2-sided profit/loss-sharing models starting with 25% profit-only sharing to 75% profit/loss-sharing, he adds. The analyst believes these rules will force providers to seek solutions and services that help organizations manage risk and perform better in risk contracts. Naidu thinks the biggest beneficiary of these movements is Evolent Health (EVH), and given Cerner's (CERN) recent investment into Lumeris and their position in hospitals, it is likely to benefit as well. Also, the draft highlights the use of telehealth and medication therapy management, further validating his bullishness on Teladoc (TDOC) and Tabula Rasa HealthCare (TRHC).

Piper says be long Evolent, Cerner on new CMS proposal. Piper Jaffray analyst Sean Wieland says the Centers for Medicare & Medicaid Services last week unveiled its proposal to get accountable care organizations to take on risk and eliminate the one-sided risk programs. Federal mandates to migrate providers toward two-sided risk should increase demand for such implementation services, because most providers aren't currently equipped to implement these programs on their own, Wieland tells investors in a research note. He believes enactment of this proposal could drive a $1.3B opportunity to these services companies over the next three years. The analyst recommends being long shares of Evolent Health (EVH) and Cerner (CERN) to invest in this theme.

New CMS proposal 'clear positive' for Evolent Health, says William Blair. The Centers for Medicare and Medicaid Services yesterday issued a proposed rule that would revamp the current Medicare Shared Savings Program, and provides some clarity on the future of existing value-based initiatives under the Trump administration, William Blair analyst Ryan Daniels tells investors in a research note. The proposal, called Pathways to Success, accelerates the push toward two-sided risk models to create greater savings, which is a "clear positive" macro-development for Evolent Health, the analyst contends. His early read of the proposal is "highly favorable" for the company. Daniels keeps an Outperform rating on Evolent Health. He believes the stock, at two times his 2019 sales forecast, offers an "attractive" risk/reward level.

Evolent Health post-earnings selloff unwarranted, says Cantor Fitzgerald. Cantor Fitzgerald analyst Steven Halper views the post-earnings selloff today in shares of Evolent Health as unwarranted. While the Q3 guidance was a bit below his estimate, the analyst believes Evolent's confidence in its pipeline is increasing. This should allay investors' concerns regarding the company's current and long-term growth strategy, Halper tells investors in a research note. He reiterates an Overweight rating on the shares with a $28 price target.