Cash Machine Trading Cheap – Astrana Health Stock Set to Run?

We think Astrana Health (ASTH) stock is worth a look: It is growing, producing cash, and available at a significant valuation discount. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market.

What Is Happening With ASTH

ASTH stock is available at a significant discount to its 3-month, 1-year, and 2-year highs. This can be attributed to recent modest 2027 Medicare Advantage payment proposals and updated timing of full-risk contract transitions into early 2026. These factors, coupled with net margins below industry standards, have affected investor outlook.

The stock may not reflect it yet, but here is what’s going well for the company: Q3 2025 revenue surged 100% from the Prospect Health acquisition, with 78% from value-based contracts supporting margin stability. Strategic partnerships are expanding reach. Low debt-to-equity and good momentum foster cash generation and future growth, while a PEG ratio around 0.74 suggests a valuation discount.

ASTH Has Strong Fundamentals

• Cash Yield: Astrana Health offers an impressive cash flow yield of 8.8%.
• Growing: Revenue growth of 68.2% over the last twelve months means that the cash pile is going to grow.
• Valuation Discount: ASTH stock is currently trading at 33% below its 3-month high, 43% below its 1-year high, and 64% below its 2-year high.

Below is a quick comparison of ASTH fundamentals with S&P medians.

*LTM: Last Twelve Months

But What About The Risk Involved?

While ASTH stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. ASTH took a serious hit in past market shocks, falling almost 100% during the Global Financial Crisis. The 2018 correction wiped out over 54%, while the Covid pandemic drop was close to 50%. The inflation shock in 2022 hit around 77%. These aren’t small dips. Even with solid fundamentals, the stock hasn’t been immune to sharp sell-offs when the market turns. It’s a clear reminder that risk remains, no matter how favorable the outlook might seem. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read ASTH Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

Other Stocks Like ASTH

Not ready to act on ASTH? You could consider these alternatives:

1. Oracle (ORCL)
2. AppLovin (APP)
3. ServiceNow (NOW)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Positive revenue growth
3. High free cash flow yield
4. Meaningful discount to 3M, 1Y, and 2Y highs

A portfolio that was built starting 12/31/2016 with stocks that fulfill the criteria above would have performed as follows:

• Average 6-month and 12-month forward returns of 25.7% and 57.9% respectively
• Win rate (percentage of picks returning positive) of >70% for both 6-month and 12-month periods

Move Beyond Single Stocks With A Multi Asset Portfolio

Stocks can jump or crash but different assets move on different cycles. A multi asset portfolio helps you stay invested while cushioning swings in equities.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices