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Why Is Acadia Healthcare (ACHC) Up 12.4% Since Last Earnings Report?
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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 12.4% 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 drivers.
Acadia Healthcare Q4 Earnings Top Estimates, Rise Y/Y
Acadia Healthcare’s fourth-quarter 2020 earnings of $1.13 per share beat the Zacks Consensus Estimate by 63.8%. The bottom line also surged 121.6% year over year. Results reflect improvement in the company’s U.S business, which gained from solid volumes, as well as its strong cost management.
However, the company’s revenues of $541 million missed the Zacks Consensus Estimate by 29.6% and also decreased 30.6% year over year. Consolidated adjusted EBITDA was $207.5 million, up 43.7% year over year. Combined adjusted EBITDA margin was 24.6%, up 610 basis points year over year.
Total expenses declined 7.6% year over year to $465.2 million on the back of lower transaction-related expenses. The company continues to realize cost savings from the steps taken in 2019 and 2020 related to its expense and cash-management strategies. During the fourth quarter of 2020, the company added 34 beds to its existing U.S. operations.
Segmental Details
Acadia Healthcare’s U.S. same facility revenues increased 7.6% year over year to $538 million, including a 3.6% increase in patient days and a 3.8% rise in revenue per patient day. U.S. same facility EBITDA margin expanded 950 basis points year over year to 34%.
U.K. same facility revenues were up 7.1% year over year to $279.3 million. The number of patient days increased 2% from the year-earlier period whereas revenue per patient per day was up 5%. On Jan 19, 2021, the company closed the sale of Acadia Healthcare’s business operations in the United Kingdom, operating under the name of The Priory Group, to Waterland Private Equity. The company used the proceeds from the U.K. transaction to pay down its outstanding debt.
Financial Update (as of Dec 31, 2020)
Cash and cash equivalents were $378.7 million, up 280% from the level on Dec 31, 2019. Long-term debt was $3 billion, down 4.4% from the figure as of Dec 31, 2019. The company exited the quarter with total assets worth $6.5 billion, down 5.5% from the level as of Dec 31, 2019.
Cash From Operations
Net cash provided by operating activities for the year 2020 was $658.8 million, up 98% year over year.
Guidance
For the first quarter of 2021, the company expects revenues in the range of $540-$550 million, adjusted EBITDA in the $110-$115 million band and adjusted earnings per share within 40-45 cents. For the full year, the company expects revenues in the range of $2.23-$2.28 million, adjusted EBITDA in the $490-$520 million band and adjusted earnings per share within $2.20-$2.45. Total capital expenditures are expected from $285 million to $325 million including approximately $45 million worth of maintenance capital expenditures. In 2021, the company expects to add approximately 300 beds to its existing facilities and 170 beds through the opening of one wholly owned facility and one joint venture facility.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -13.39% due to these changes.
VGM Scores
Currently, Acadia Healthcare has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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. It's no surprise Acadia Healthcare has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Acadia Healthcare (ACHC) Up 12.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Acadia Healthcare (ACHC - Free Report) . Shares have added about 12.4% 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 drivers.
Acadia Healthcare Q4 Earnings Top Estimates, Rise Y/Y
Acadia Healthcare’s fourth-quarter 2020 earnings of $1.13 per share beat the Zacks Consensus Estimate by 63.8%. The bottom line also surged 121.6% year over year. Results reflect improvement in the company’s U.S business, which gained from solid volumes, as well as its strong cost management.
However, the company’s revenues of $541 million missed the Zacks Consensus Estimate by 29.6% and also decreased 30.6% year over year.
Consolidated adjusted EBITDA was $207.5 million, up 43.7% year over year. Combined adjusted EBITDA margin was 24.6%, up 610 basis points year over year.
Total expenses declined 7.6% year over year to $465.2 million on the back of lower transaction-related expenses. The company continues to realize cost savings from the steps taken in 2019 and 2020 related to its expense and cash-management strategies. During the fourth quarter of 2020, the company added 34 beds to its existing U.S. operations.
Segmental Details
Acadia Healthcare’s U.S. same facility revenues increased 7.6% year over year to $538 million, including a 3.6% increase in patient days and a 3.8% rise in revenue per patient day. U.S. same facility EBITDA margin expanded 950 basis points year over year to 34%.
U.K. same facility revenues were up 7.1% year over year to $279.3 million. The number of patient days increased 2% from the year-earlier period whereas revenue per patient per day was up 5%. On Jan 19, 2021, the company closed the sale of Acadia Healthcare’s business operations in the United Kingdom, operating under the name of The Priory Group, to Waterland Private Equity. The company used the proceeds from the U.K. transaction to pay down its outstanding debt.
Financial Update (as of Dec 31, 2020)
Cash and cash equivalents were $378.7 million, up 280% from the level on Dec 31, 2019. Long-term debt was $3 billion, down 4.4% from the figure as of Dec 31, 2019. The company exited the quarter with total assets worth $6.5 billion, down 5.5% from the level as of Dec 31, 2019.
Cash From Operations
Net cash provided by operating activities for the year 2020 was $658.8 million, up 98% year over year.
Guidance
For the first quarter of 2021, the company expects revenues in the range of $540-$550 million, adjusted EBITDA in the $110-$115 million band and adjusted earnings per share within 40-45 cents. For the full year, the company expects revenues in the range of $2.23-$2.28 million, adjusted EBITDA in the $490-$520 million band and adjusted earnings per share within $2.20-$2.45. Total capital expenditures are expected from $285 million to $325 million including approximately $45 million worth of maintenance capital expenditures. In 2021, the company expects to add approximately 300 beds to its existing facilities and 170 beds through the opening of one wholly owned facility and one joint venture facility.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -13.39% due to these changes.
VGM Scores
Currently, Acadia Healthcare has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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. It's no surprise Acadia Healthcare has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.