What Happened?

A number of stocks jumped in the afternoon session after a softer-than-expected inflation report fueled hopes for interest rate cuts by the Federal Reserve. The January Consumer Price Index (CPI), a key measure of inflation, rose by 0.2%, which was less than economists had forecast, with the annual rate cooling to 2.4%. This encouraging data increased market expectations for the Fed to begin cutting interest rates as early as June. The news prompted a rally in Treasuries as their yields fell. While the market's reaction was initially described as a "bumpy ride" due to concerns in other sectors, the favorable inflation data ultimately helped calm Wall Street. Lower inflation is a key prerequisite for the central bank to ease its monetary policy, which is generally supportive of stock valuations.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Medical Devices & Supplies - Specialty company Inspire Medical Systems (NYSE: INSP) jumped 3.1%. Is now the time to buy Inspire Medical Systems? Access our full analysis report here, it’s free.
• Healthcare Technology for Providers company Astrana Health (NASDAQ: ASTH) jumped 3.8%. Is now the time to buy Astrana Health? Access our full analysis report here, it’s free.
• Healthcare Technology for Providers company Evolent Health (NYSE: EVH) jumped 3.6%. Is now the time to buy Evolent Health? Access our full analysis report here, it’s free.
• Branded Pharmaceuticals company Corcept (NASDAQ: CORT) jumped 3.7%. Is now the time to buy Corcept? Access our full analysis report here, it’s free.
• Health Insurance Providers company Centene (NYSE: CNC) jumped 3.5%. Is now the time to buy Centene? Access our full analysis report here, it’s free.

Zooming In On Astrana Health (ASTH)

Astrana Health’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock gained 34.2% on the news that the company reported better-than-expected second-quarter sales and significantly raised its full-year revenue forecast, overshadowing a miss on earnings per share. The healthcare services company announced second-quarter revenue of $654.8 million, a 34.7% increase year-over-year. While this topped sales expectations, its GAAP profit of $0.19 per share fell short of analysts' consensus estimates. However, investors focused on the company's strong future outlook. Astrana boosted its full-year revenue guidance to a midpoint of $3.2 billion, a significant jump from the previous $2.6 billion forecast. Furthermore, its third-quarter revenue projection of $945 million is 17.2% above what analysts were anticipating.

Astrana Health is down 25.5% since the beginning of the year, and at $18.78 per share, it is trading 52.1% below its 52-week high of $39.20 from February 2025. Investors who bought $1,000 worth of Astrana Health’s shares 5 years ago would now be looking at an investment worth $780.14.

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