INNV Stock Forecast & Price Target

InnovAge Holding is attractive because its FY4Q results showed strong operating leverage, with EBITDA of $24.3M up 114% y/y and 33% above Street, while revenue rose 18% to $262.0M on 6.9% census growth, 10% PMPM growth, and tightly controlled external medical costs of just 0.3% PMPM. Management’s FY27 guidance of $105M-$115M EBITDA and $1.050B-$1.085B revenue sits above Street expectations, and the business appears able to preserve its 10%+ margin trajectory through disciplined pricing, member-experience investments, and technology/AI that could reduce churn and support growth. The bullish case is further strengthened by the completed turnaround, ~54% center utilization across 20 centers, and PACE’s transparent, value-based model, which HHS has said shows “strong evidence” of better outcomes and lower hospitalizations, ED visits, and mortality.

InnovAge Holding is exposed to material regulatory and reimbursement risk because roughly 55% of revenue comes from Medicaid, leaving the company vulnerable to state budget pressure, funding scrutiny, and potential sanctions on new member enrollment. The transition from the v22 to v28 risk adjustment model also creates uncertainty, with CY26 risk scores based on only a 10%/90% v28/v22 blend before rising to 50%/50% in CY27 and full phase-in in CY28. Although dementia coding may offset some of the model headwind given that about 40% of PACE members have the disease, the company still faces profitability risk in at-risk contracts and exposure to public health disruptions.