agilon health: When Growth Becomes a Mirage—How $6 Billion in Revenue Can Still Leave You Thirsty
Imagine building a $6 billion revenue engine and still watching your stock sink like a stone. In the last six months, agilon health, inc. (NYSE: AGL) delivered a masterclass in how scale can betray, not save, a business model under strain.
The Desert Blooms: Revenue Surges, But the Oasis Dries Up
agilon’s narrative should have been a Wall Street darling: in Q3 2025, revenue clocked in at $1.44 billion, pushing twelve-month sales past $6 billion. Membership in its value-based care platform swelled to 618,000. For a fleeting moment, the surface shimmered—growth in the face of industry turbulence.
But the market is not fooled by mirages. Gross margin for the latest quarter was a parched -3.76%, and the medical margin, once a point of pride, turned negative at -$57 million. Adjusted EBITDA for Q3 2025? - $91 million. Annual net losses now total -$262 million, and the company’s cash position has withered, declining by over $70 million in the first half of 2025 alone. For every dollar that comes in, more than a dollar leaks out—the kind of math even the sun can’t bleach away.
Wall Street’s Patience Runs Out: A Trading-Post Exodus
Investors are voting with their feet. In the last six months, agilon’s shares have cratered 77.8%, with a year-on-year drop of 70.7%. On August 5, 2025, the company withdrew its 2025 guidance, citing “market uncertainties and execution challenges”—a phrase that rarely inspires confidence. By November, the NYSE had issued a non-compliance notice as the stock traded below $1.00 for 30 straight days. As of this writing, the market cap floats perilously, and the company is preparing for a reverse split just to remain listed. This is not the stuff of a sector leader—it’s a lifeline thrown into choppy waters.
Why the Well Ran Dry: The Mirage of Value-Based Care
agilon’s promise was to ride the shift from fee-for-service to value-based care, empowering physicians and slashing inefficiency. But the business model is a cruel taskmaster. The medical loss ratio—how much of every premium dollar is spent on patient care—has consistently run too high. No matter how much revenue swells, expenses outpace them. In 2025, the company’s gross margin was just 0.08% for the full year, and it turned negative as execution faltered. Operating margins have plunged from -3.5% in 2023 to -6.3% by 2025, while net income margin has worsened from -2.2% to -5.2%.
Efforts to exit unprofitable partnerships and trim costs have not stemmed the tide. Membership in Medicare Advantage, the lifeblood of the model, actually declined from 513,000 to 498,000 year-over-year, as agilon retreated from riskier markets. The company now predicts revenue growth of just 21% in 2025, down sharply from the heady days of 59% growth in 2023. Meanwhile, EPS remains negative, with analysts expecting -$0.85 in 2025 and -$0.60 in 2026.
Competitors, Giants, and the Shadow of Regulation
agilon is not alone in the desert. It faces stiff competition from capital-rich giants like UnitedHealth’s Optum and CVS Health’s Oak Street, who pair massive scale with vertical integration and robust balance sheets. Physician enablement rivals such as Privia Health employ less risky partnership models. As the industry shifts, only those who can squeeze profit from scale survive. agilon’s approach—taking on full risk for patient populations—has not proven profitable, while competitors have found ways to thrive.
Regulatory sandstorms loom, too. The company’s fate is tied to Medicare Advantage payment rates and shifting policy winds. The 2025 Budget Reconciliation Act and other legislative tweaks have injected new uncertainty, complicating forecasts and raising the stakes for every misstep.
Leadership in Flux and the Search for Water
The leadership vacuum only deepens the malaise. With the CEO’s departure in August 2025, an “Office of the Chairman” is now at the helm. Agilon is searching for a new chief to chart a course back to profitability, but the market rarely waits for resumes to be sorted.
Conclusion: A Cautionary Tale Etched in Sand
agilon health’s story is not a failure of ambition or innovation—it’s a warning that in healthcare, scale without sustainable margins is a mirage. In the six months leading up to November 2025, investors have learned that $6 billion in revenue can still leave you parched if the well of profitability runs dry. Until agilon proves it can turn scale into sustainable cash flow, Wall Street’s thirst will remain unquenched.