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Acadia Healthcare to Benefit from Growing Behavioral Issues
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Acadia Healthcare Co., Inc. (ACHC - Free Report) is poised to grow on increasing incidence of behavioral illness in the United States.
Per Substance Abuse and Mental Health Services Administration, (SAMHSA) in 2014, an estimated 9.8 million adults aged 18 and older in the United States had serious mental illness and an estimated 22.5 million Americans aged 12 and older self-reported needing treatment for alcohol or illicit drug use, and 11.8 million adults self-reported needing mental health treatment or counseling in the past year.
Per SAMHSA, these disorders are among the top conditions that cause disability and carry a high burden of disease in the United States, resulting in significant costs to families, employers and publicly funded health systems. By 2020, mental and substance use disorders will surpass all physical diseases as a major cause of disability worldwide.
Though this is really is worrying, these trends bode well for Acadia Healthcare, which provides behavioral healthcare in a variety of settings such as inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers, and outpatient clinics.
We expect these trends to aid the company’s revenues that have from 2013-2017 witnessed a CAGR of 41%. The trend continued in the first half of 2018 with revenues increasing 8%.
For 2018, the company expects revenues between $3.02 billion and $3.06 billion, which translates into year-over-year growth of 7%. The company is in the process of opening approximately 800 new beds, to existing facilities and new facilities in 2018, which should further aid top-line growth.
Moreover, Acadia Healthcare has been emphasizing acquisitions for expedited growth. A number of buyouts made by the company have added facilities, beds and hospitals to the company’s network and contributed to its top line.
The company remains actively engaged with its acquisition pipeline and expects its 2018 acquisition and joint venture activity to be heavily skewed toward acute facilities in the United States.
It is quite well positioned to fund its new bed development and acquisition activity given its strong capital position. The company’s acquisitions are expected to add scale to its business, positioning it better to weather the regulatory uncertainty in the healthcare sector.
Acadia Healthcare’s shares have gained 22% year to date, underperforming the industry's growth of 34%.
The company, which is a provider of behavioral health and addiction services to patients, carries a Zacks Rank #3 (Hold). Other stocks worth considering in the medical space are Medpace Holdings, Inc. (MEDP - Free Report) , PRA Health Sciences, Inc. and OpGen, Inc. (OPGN - Free Report) . While Medpace carries a Zacks Rank #1 (Strong Buy), each of the other two stocks carries a Zacks Rank #2 (Buy).
Medpace Holdings, PRA Health Sciences and OpGen delivered positive surprises in the last four quarters, with an average beat of 23.97%, 7.96% and 4.5%, respectively.
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Acadia Healthcare to Benefit from Growing Behavioral Issues
Acadia Healthcare Co., Inc. (ACHC - Free Report) is poised to grow on increasing incidence of behavioral illness in the United States.
Per Substance Abuse and Mental Health Services Administration, (SAMHSA) in 2014, an estimated 9.8 million adults aged 18 and older in the United States had serious mental illness and an estimated 22.5 million Americans aged 12 and older self-reported needing treatment for alcohol or illicit drug use, and 11.8 million adults self-reported needing mental health treatment or counseling in the past year.
Per SAMHSA, these disorders are among the top conditions that cause disability and carry a high burden of disease in the United States, resulting in significant costs to families, employers and publicly funded health systems. By 2020, mental and substance use disorders will surpass all physical diseases as a major cause of disability worldwide.
Though this is really is worrying, these trends bode well for Acadia Healthcare, which provides behavioral healthcare in a variety of settings such as inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers, and outpatient clinics.
We expect these trends to aid the company’s revenues that have from 2013-2017 witnessed a CAGR of 41%. The trend continued in the first half of 2018 with revenues increasing 8%.
For 2018, the company expects revenues between $3.02 billion and $3.06 billion, which translates into year-over-year growth of 7%. The company is in the process of opening approximately 800 new beds, to existing facilities and new facilities in 2018, which should further aid top-line growth.
Moreover, Acadia Healthcare has been emphasizing acquisitions for expedited growth. A number of buyouts made by the company have added facilities, beds and hospitals to the company’s network and contributed to its top line.
The company remains actively engaged with its acquisition pipeline and expects its 2018 acquisition and joint venture activity to be heavily skewed toward acute facilities in the United States.
It is quite well positioned to fund its new bed development and acquisition activity given its strong capital position. The company’s acquisitions are expected to add scale to its business, positioning it better to weather the regulatory uncertainty in the healthcare sector.
Acadia Healthcare’s shares have gained 22% year to date, underperforming the industry's growth of 34%.
The company, which is a provider of behavioral health and addiction services to patients, carries a Zacks Rank #3 (Hold). Other stocks worth considering in the medical space are Medpace Holdings, Inc. (MEDP - Free Report) , PRA Health Sciences, Inc. and OpGen, Inc. (OPGN - Free Report) . While Medpace carries a Zacks Rank #1 (Strong Buy), each of the other two stocks carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace Holdings, PRA Health Sciences and OpGen delivered positive surprises in the last four quarters, with an average beat of 23.97%, 7.96% and 4.5%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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