INNV Stock Forecast & Price Target

InnovAge Holding is viewed positively because its FY26 results showed strong operating leverage, with EBITDA of $24.3M, up 114% y/y and 33% above Street, while revenue reached $262.0M on 6.9% census growth and 10% revenue PMPM growth. Medical costs remained tightly controlled, with external cost PMPM up just 0.3% as lower SNF utilization and pharmacy costs helped expand EBITDA margin by 420 bps to 9.3%, supporting confidence that the turnaround is complete. The outlook is further strengthened by FY27 EBITDA guidance of $105M-$115M, revenue of $1,050M-$1,085M, and margins projected to expand toward 10.3%, aided by rate increases, disciplined expense management, and operational initiatives that could accelerate growth and sustain margins.

InnovAge Holding is exposed to meaningful regulatory and reimbursement risk because Medicare and Medicaid can impose sanctions on new member enrollment, while roughly 55% of revenue comes from Medicaid and thus depends on state budgets that management has already described as under pressure from OBBB implementation. The company also faces uncertainty from the v28 risk-adjustment transition in CY26, CY27, and CY28, which could pressure economics even if dementia coding helps offset some impact given that about 40% of PACE members have the disease. Although PACE has clear clinical benefits and transparent value delivery, profitability remains vulnerable if funding tightens or if at-risk contracts fail to hold margins amid public health disruptions.