Agilon Health Seeks a $1 Billion IPO Despite Losses

After divulging a price range for the initial public shares, it seems that Agilon Health is reaching high for its IPO fundraising. With a total projected valuation of $9 billion, Agilon expects to earn $1 billion from the offering.

Agilon developed a healthcare platform for primary care physicians who take care of senior citizens. Despite the growth in just a few short years, Agilon is still a young company looking to find its footing—but it didn't want to miss the ongoing IPO wave. 

At $20–$23 per share, the Agilon IPO is priced fairly on a per-share basis. With 46.6 million shares on offer, the company is looking to raise just over $1 billion at the mid-range. This is pretty hefty, especially considering Agilon's fast growth.

A private equity firm named Clayton Dubilier & Rice founded Agilon in 2016. Now, just half a decade later, the health tech company is underwritten by JPMorgan, Goldman Sachs, and Bank of America. After raising the projected $1 billion, Agilon's valuation will be at $9 billion—with most of that coming from institutional venture funding.  

Usually, companies release information about the upcoming IPO in steps. Now that Agilon has divulged a price range, investors are waiting for a firm price as well as an official IPO date. Until then, all we have on the date is that it's soon.

In five years, Agilon has expanded its reach to 17 local communities composed of 16 anchor physician groups. This is in addition to its physician network in Hawaii. At first glance, this doesn't seem like a lot, but it's a much stronger position than Agilon started out in. However, it's up for debate whether this footing is enough to make Agilon sustainable. An investment in this startup organization might be riskier.

Also, Agilon has plenty of losses to account for. According to the company's form S-1 (or SEC registration statement), the total revenue in 2020 was $1.218 million. However, the expenses amounted to $1.279 million. Ultimately, Agilon delivered a net loss of more than $60,000.

A lack of profitability isn't uncommon in the IPO space, especially when you're dealing with startups. But that doesn't mean that it doesn't bring additional risk. Agilon depends on more expansion for continued success. Investors should understand the company's operating strategy and financial health before making any investment decisions. 

On the IPO date, Agilon will list on the NYSE under the ticker symbol "AGL." Hours after the market debut, retail investors will be able to access Agilon through their usual brokerage. However, the $20–$23 share price likely won't last until then. Preferred investors will have bought and sold enough to send the stock higher or lower than the initial price.