1 Healthcare Stock to Target This Week and 2 We Find Risky

Healthcare companies are pushing the status quo by innovating in areas like drug development and digital health. Players catalyzing medical advancements have benefited from elevated demand, and their momentum is only rising as the industry has posted a 18.7% gain over the past six months, beating the S&P 500 by 8.9 percentage points.

Nevertheless, investors should tread carefully as the sector is heavily regulated, and businesses can be negatively impacted if the rules change. With that said, here is one resilient healthcare stock at the top of our wish list and two best left ignored.

Two Healthcare Stocks to Sell:

Surgery Partners (SGRY)

Market Cap: $1.80 billion

With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ:SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.

Why Are We Cautious About SGRY?

1. Disappointing unit sales over the past two years suggest it might have to lower prices to accelerate growth
2. Poor free cash flow margin of 4.6% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

At $14.07 per share, Surgery Partners trades at 22.9x forward P/E. If you’re considering SGRY for your portfolio, see our FREE research report to learn more.

Evolent Health (EVH)

Market Cap: $341.5 million

Founded in 2011 to transform how healthcare is delivered to patients with complex needs, Evolent Health (NYSE:EVH) provides specialty care management services and technology solutions that help health plans and providers deliver better care for patients with complex conditions.

Why Does EVH Worry Us?

1. Annual revenue growth of 7.1% over the last two years was below our standards for the healthcare sector
2. Push for growth has led to negative returns on capital, signaling value destruction, and its decreasing returns suggest its historical profit centers are aging
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Evolent Health’s stock price of $3.10 implies a valuation ratio of 13.8x forward P/E. Read our free research report to see why you should think twice about including EVH in your portfolio.

One Healthcare Stock to Watch:

agilon health (AGL)

Market Cap: $285.8 million

Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE:AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.

Why Could AGL Be a Winner?

1. Annual revenue growth of 37.2% over the past five years was outstanding, reflecting market share gains this cycle
2. Average customer growth of 19.9% over the past two years demonstrates success in acquiring new clients that could increase their spending in the future
3. Cash burn has decreased over the last five years, showing the company is becoming a more self-sustaining business

agilon health is trading at $0.69 per share, or 0.1x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.