What Happened?
A number of stocks fell in the afternoon session after the February jobs report revealed an unexpected contraction in employment, with the healthcare industry showing significant job losses.
According to the Bureau of Labor Statistics, the economy lost 92,000 nonfarm payroll jobs, a stark reversal from the 50,000 gain that was anticipated by economists. The healthcare sector, typically a consistent source of job growth, shed 28,000 positions. This disappointing data has raised investor concerns about a potential economic slowdown, which could lead to reduced healthcare spending and demand for services, contributing to the sector's decline in the market.
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:
- Specialized Medical & Nursing Services company AMN Healthcare Services (NYSE: AMN) fell 5.5%. Is now the time to buy AMN Healthcare Services? Access our full analysis report here, it’s free.
- Testing & Diagnostics Services company RadNet (NASDAQ: RDNT) fell 6.5%. Is now the time to buy RadNet? Access our full analysis report here, it’s free.
- Healthcare Technology for Providers company Evolent Health (NYSE: EVH) fell 6.9%. Is now the time to buy Evolent Health? Access our full analysis report here, it’s free.
- Drug Development Inputs & Services company Repligen (NASDAQ: RGEN) fell 4.4%. Is now the time to buy Repligen? Access our full analysis report here, it’s free.
- Generic Pharmaceuticals company Amphastar Pharmaceuticals (NASDAQ: AMPH) fell 6.1%. Is now the time to buy Amphastar Pharmaceuticals? Access our full analysis report here, it’s free.
Zooming In On Evolent Health (EVH)
Evolent Health’s shares are extremely volatile and have had 46 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 previous big move we wrote about was 7 days ago when the stock dropped 4.7% on the news that a surprisingly hot wholesale inflation report fueled investor concerns about persistent price pressures.
The Producer Price Index (PPI), a key measure of inflation at the wholesale level, increased by 0.5% in January, significantly higher than the 0.3% anticipated by economists. More concerning was the core PPI, which excludes volatile food and energy prices, as it surged by 0.8%, far exceeding the expected 0.3% rise. This data suggests that inflation may be more entrenched than previously thought, potentially impacting future interest rate decisions. In response to the news, major market indices, including the S&P 500, Dow Jones, and Nasdaq, all traded sharply lower as investors reassessed the economic outlook.
Evolent Health is down 18.6% since the beginning of the year, and at $3.17 per share, it is trading 73.1% below its 52-week high of $11.79 from July 2025. Investors who bought $1,000 worth of Evolent Health’s shares 5 years ago would now be looking at an investment worth $167.25.
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