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Why You Should Keep Acadia Healthcare (ACHC) in Your Portfolio
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Acadia Healthcare Company, Inc. (ACHC - Free Report) is well-poised to grow on the back of solid investments in technology and profitable assets. Despite facing multiple constraints, shares of ACHC gained 49.2% in the past year.
Acadia Healthcare — with a market cap of $7.8 billion — is a behavioral healthcare services provider in the United States and Puerto Rico. Based in Franklin, TN, ACHC is likely to benefit from the rising patient days and bed capacity. Courtesy of solid prospects, this presently Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for ACHC’s 2022 earnings is pegged at $3.10 per share, indicating 21.1% year-over-year growth. The estimate remained stable over the past month. Acadia Healthcare beat on earnings in two of the last four quarters, met once and missed on the other occasion, with an average surprise of 3.5%.
Acadia Healthcare Company, Inc. Price and EPS Surprise
The consensus mark for 2022 revenues is $2.6 billion, signaling 12.1% growth from a year ago.
Acadia Healthcare is expected to boost investments in technology to increase operational efficiency and margins in the long term. Its long-term goals include a 9-11% CAGR in revenues from 2022 to 2028 to $4.5-$5 billion. During this time, its adjusted EBITDA is estimated to witness a 10-12% CAGR to reach $1.06-$1.20 billion in 2028.
Further, within the 2022 to 2028 period, the company expects 5-8% patient day growth while bed capacity might witness a 7-10% jump per annum. With increasing non-COVID utilization of resources, the company’s volumes are expected to grow significantly. Also, the constant growth in the senior population is expected to be beneficial for companies like ACHC as the demand for hospital services rises.
Acquisitions and joint ventures are expected to continue helping the company to add scale to its business, positioning it better to weather regulatory uncertainties. Opportunistic acquisitions to expand in the behavioral healthcare industry and increasing footprint in acute care bode well for the company.
It does not shy away from shedding assets with lower profitability and non-core operations either. Acadia Healthcare divested the underperforming U.K. operations to Waterland Private Equity to improve profitability.
Key Concerns
There are a few factors that might affect the stock’s growth.
Acadia Healthcare’s rising expense level is concerning. Our estimate for Salaries, Wages & Benefits for 2022 indicates 11% year-over-year growth. Also, in the trailing 12-month period, its free cash flows declined 46.4% year over year. Nevertheless, we believe that a systematic and strategic plan of action will drive growth in the long term.
The Zacks Consensus Estimate for Biodesix’s 2022 earnings indicates an 11.4% improvement from the prior-year reported number. BDSX has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
The Zacks Consensus Estimate for Altimmune’s 2022 bottom line indicates a 9.7% improvement from the prior-year reported number. ALT beat earnings estimates in each of the past four quarters with an average surprise of 13.7%.
The Zacks Consensus Estimate for AMN Healthcare’s 2022 bottom line indicates a 44% improvement from the prior-year reported number. The consensus estimate for AMN’s top line suggests 30.1% year-over-year growth.
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Why You Should Keep Acadia Healthcare (ACHC) in Your Portfolio
Acadia Healthcare Company, Inc. (ACHC - Free Report) is well-poised to grow on the back of solid investments in technology and profitable assets. Despite facing multiple constraints, shares of ACHC gained 49.2% in the past year.
Acadia Healthcare — with a market cap of $7.8 billion — is a behavioral healthcare services provider in the United States and Puerto Rico. Based in Franklin, TN, ACHC is likely to benefit from the rising patient days and bed capacity. Courtesy of solid prospects, this presently Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for ACHC’s 2022 earnings is pegged at $3.10 per share, indicating 21.1% year-over-year growth. The estimate remained stable over the past month. Acadia Healthcare beat on earnings in two of the last four quarters, met once and missed on the other occasion, with an average surprise of 3.5%.
Acadia Healthcare Company, Inc. Price and EPS Surprise
Acadia Healthcare Company, Inc. price-eps-surprise | Acadia Healthcare Company, Inc. Quote
The consensus mark for 2022 revenues is $2.6 billion, signaling 12.1% growth from a year ago.
Acadia Healthcare is expected to boost investments in technology to increase operational efficiency and margins in the long term. Its long-term goals include a 9-11% CAGR in revenues from 2022 to 2028 to $4.5-$5 billion. During this time, its adjusted EBITDA is estimated to witness a 10-12% CAGR to reach $1.06-$1.20 billion in 2028.
Further, within the 2022 to 2028 period, the company expects 5-8% patient day growth while bed capacity might witness a 7-10% jump per annum. With increasing non-COVID utilization of resources, the company’s volumes are expected to grow significantly. Also, the constant growth in the senior population is expected to be beneficial for companies like ACHC as the demand for hospital services rises.
Acquisitions and joint ventures are expected to continue helping the company to add scale to its business, positioning it better to weather regulatory uncertainties. Opportunistic acquisitions to expand in the behavioral healthcare industry and increasing footprint in acute care bode well for the company.
It does not shy away from shedding assets with lower profitability and non-core operations either. Acadia Healthcare divested the underperforming U.K. operations to Waterland Private Equity to improve profitability.
Key Concerns
There are a few factors that might affect the stock’s growth.
Acadia Healthcare’s rising expense level is concerning. Our estimate for Salaries, Wages & Benefits for 2022 indicates 11% year-over-year growth. Also, in the trailing 12-month period, its free cash flows declined 46.4% year over year. Nevertheless, we believe that a systematic and strategic plan of action will drive growth in the long term.
Better-Ranked Players
Some better-ranked stocks from the broader medical space are Biodesix, Inc. (BDSX - Free Report) , Altimmune, Inc. (ALT - Free Report) and AMN Healthcare Services, Inc. (AMN - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Biodesix’s 2022 earnings indicates an 11.4% improvement from the prior-year reported number. BDSX has witnessed one upward estimate revision in the past 60 days against none in the opposite direction.
The Zacks Consensus Estimate for Altimmune’s 2022 bottom line indicates a 9.7% improvement from the prior-year reported number. ALT beat earnings estimates in each of the past four quarters with an average surprise of 13.7%.
The Zacks Consensus Estimate for AMN Healthcare’s 2022 bottom line indicates a 44% improvement from the prior-year reported number. The consensus estimate for AMN’s top line suggests 30.1% year-over-year growth.