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Acadia Healthcare (ACHC) Up 7.2% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Acadia Healthcare (ACHC - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Acadia Healthcare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Acadia Healthcare Meets Q3 Earnings
Acadia Healthcare reported third-quarter 2022 adjusted earnings of 80 cents per share, in line with the Zacks Consensus Estimate. The bottom line improved 6.8% year over year.
Total revenues of $666.7 million rose 13.5% year over year in the quarter under review. The top line outpaced the consensus mark by 1.5%.
Despite witnessing solid demand for behavioral health services and improved admissions, an elevated expense level, probably resulting from the labor scarcity hounding the entire United States, might have dampened ACHC’s quarterly results.
Q3 Operations
Total U.S. same-facility revenues rose 10.2% year over year to $640.3 million. The improvement came on the back of 6.9% growth in revenue per patient day and a 3.1% rise in patient days. Average length of stay increased 2.5% year over year in the third quarter. Admissions inched up 0.6% year over year, while the Zacks Consensus Estimate suggested the metric to witness a 2.5% year-over-year increase.
In the overall U.S. facility, patient days rose 5.3% year over year. Revenue per patient day grew 7.7% year over year in the quarter under review, while admissions increased 5.4% year over year.
Adjusted EBITDA of $162.8 million climbed 14.7% year over year. Adjusted EBITDA margin expanded 30 basis points year over year to 24.4%. Adjusted EBITDA, excluding income from provider relief fund (PRF), ascended 9.3% year over year to $155.1 million in the third quarter.
Total expenses escalated 13.4% year over year to $569.6 million, mainly due to increased salaries, wages and benefits, transaction-related expenses and professional fees.
Acadia Healthcare added 132 beds to its existing operations during the third quarter.
Financial Update (as of Sep 30, 2022)
ACHC exited the third quarter with cash and cash equivalents of $93.4 million, which plunged 30.2% from the 2021-end level. It had $515 million left under its $600-million revolving credit facility at the third-quarter end.
Total assets of $4,943.1 million increased 3.7% from the figure at 2021 end.
Long-term debt amounted to $1,379.3 million, down 6.7% from the figure as of Dec 31, 2021. The current portion of the long-term debt was $21.3 million.
Total equity improved 9% from the 2021-end level to $2,743.7 million. Net leverage ratio came in at 2.1X at the third-quarter end.
During the first nine months ended Sep 30, 2022, net cash provided by operating activities declined 3.5% from the prior-year comparable period’s level to $267 million.
2022 Outlook
Management revised full-year guidance.
Revenues are presently estimated within $2.58-$2.60 billion. The lower end of the altered outlook was raised from the prior outlook of $2.56-$2.60 billion. The mid-point of the adjusted guidance indicates a rise of 12.6% from the 2021 reported figure.
Acadia Healthcare is on course to adding roughly 300 beds to its existing facilities this year. It also remains on track to inaugurate a minimum of six Comprehensive Treatment Centers (CTCs) in 2022.
Adjusted EBITDA, including income from PRF, is anticipated between $611 million and $621 million. The earlier view called for the metric to lie within $591.5-$621.5 million. Adjusted EBITDA, excluding income from PRF, is predicted within $595-$605 million compared with the prior guidance of $583-$613 million.
Adjusted EPS is estimated within $3.00-$3.10. The lower end of the updated outlook was increased from the prior view of $2.93-$3.18, while the higher end was trimmed. The midpoint of the revised guidance indicates an increase of 19.1% from the 2021 reported figure.
Interest expense is anticipated at around $70 million, while the earlier outlook estimated the metric within $67-$70 million.
Operating cash flows for 2022 are expected in the $360-$400 million range, down from the prior view of $380-$430 million.
Capital expenditures for expansion initiatives are predicted to stay between $210 million and $230 million, down from the previous expectation of $240-$280 million. The same for maintenance is projected at around $60 million, up from the prior view of roughly $50 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.44% due to these changes.
VGM Scores
Currently, Acadia Healthcare has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Acadia Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Acadia Healthcare is part of the Zacks Medical - Hospital industry. Over the past month, Universal Health Services (UHS - Free Report) , a stock from the same industry, has gained 11.3%. The company reported its results for the quarter ended September 2022 more than a month ago.
Universal Health Services reported revenues of $3.34 billion in the last reported quarter, representing a year-over-year change of +5.7%. EPS of $2.54 for the same period compares with $2.67 a year ago.
For the current quarter, Universal Health Services is expected to post earnings of $3.01 per share, indicating a change of +2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Universal Health Services. Also, the stock has a VGM Score of B.
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Acadia Healthcare (ACHC) Up 7.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Acadia Healthcare (ACHC - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Acadia Healthcare due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Acadia Healthcare Meets Q3 Earnings
Acadia Healthcare reported third-quarter 2022 adjusted earnings of 80 cents per share, in line with the Zacks Consensus Estimate. The bottom line improved 6.8% year over year.
Total revenues of $666.7 million rose 13.5% year over year in the quarter under review. The top line outpaced the consensus mark by 1.5%.
Despite witnessing solid demand for behavioral health services and improved admissions, an elevated expense level, probably resulting from the labor scarcity hounding the entire United States, might have dampened ACHC’s quarterly results.
Q3 Operations
Total U.S. same-facility revenues rose 10.2% year over year to $640.3 million. The improvement came on the back of 6.9% growth in revenue per patient day and a 3.1% rise in patient days. Average length of stay increased 2.5% year over year in the third quarter. Admissions inched up 0.6% year over year, while the Zacks Consensus Estimate suggested the metric to witness a 2.5% year-over-year increase.
In the overall U.S. facility, patient days rose 5.3% year over year. Revenue per patient day grew 7.7% year over year in the quarter under review, while admissions increased 5.4% year over year.
Adjusted EBITDA of $162.8 million climbed 14.7% year over year. Adjusted EBITDA margin expanded 30 basis points year over year to 24.4%. Adjusted EBITDA, excluding income from provider relief fund (PRF), ascended 9.3% year over year to $155.1 million in the third quarter.
Total expenses escalated 13.4% year over year to $569.6 million, mainly due to increased salaries, wages and benefits, transaction-related expenses and professional fees.
Acadia Healthcare added 132 beds to its existing operations during the third quarter.
Financial Update (as of Sep 30, 2022)
ACHC exited the third quarter with cash and cash equivalents of $93.4 million, which plunged 30.2% from the 2021-end level. It had $515 million left under its $600-million revolving credit facility at the third-quarter end.
Total assets of $4,943.1 million increased 3.7% from the figure at 2021 end.
Long-term debt amounted to $1,379.3 million, down 6.7% from the figure as of Dec 31, 2021. The current portion of the long-term debt was $21.3 million.
Total equity improved 9% from the 2021-end level to $2,743.7 million. Net leverage ratio came in at 2.1X at the third-quarter end.
During the first nine months ended Sep 30, 2022, net cash provided by operating activities declined 3.5% from the prior-year comparable period’s level to $267 million.
2022 Outlook
Management revised full-year guidance.
Revenues are presently estimated within $2.58-$2.60 billion. The lower end of the altered outlook was raised from the prior outlook of $2.56-$2.60 billion. The mid-point of the adjusted guidance indicates a rise of 12.6% from the 2021 reported figure.
Acadia Healthcare is on course to adding roughly 300 beds to its existing facilities this year. It also remains on track to inaugurate a minimum of six Comprehensive Treatment Centers (CTCs) in 2022.
Adjusted EBITDA, including income from PRF, is anticipated between $611 million and $621 million. The earlier view called for the metric to lie within $591.5-$621.5 million. Adjusted EBITDA, excluding income from PRF, is predicted within $595-$605 million compared with the prior guidance of $583-$613 million.
Adjusted EPS is estimated within $3.00-$3.10. The lower end of the updated outlook was increased from the prior view of $2.93-$3.18, while the higher end was trimmed. The midpoint of the revised guidance indicates an increase of 19.1% from the 2021 reported figure.
Interest expense is anticipated at around $70 million, while the earlier outlook estimated the metric within $67-$70 million.
Operating cash flows for 2022 are expected in the $360-$400 million range, down from the prior view of $380-$430 million.
Capital expenditures for expansion initiatives are predicted to stay between $210 million and $230 million, down from the previous expectation of $240-$280 million. The same for maintenance is projected at around $60 million, up from the prior view of roughly $50 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -6.44% due to these changes.
VGM Scores
Currently, Acadia Healthcare has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Acadia Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Acadia Healthcare is part of the Zacks Medical - Hospital industry. Over the past month, Universal Health Services (UHS - Free Report) , a stock from the same industry, has gained 11.3%. The company reported its results for the quarter ended September 2022 more than a month ago.
Universal Health Services reported revenues of $3.34 billion in the last reported quarter, representing a year-over-year change of +5.7%. EPS of $2.54 for the same period compares with $2.67 a year ago.
For the current quarter, Universal Health Services is expected to post earnings of $3.01 per share, indicating a change of +2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Universal Health Services. Also, the stock has a VGM Score of B.