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Acadia Healthcare (ACHC) Down 6.8% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Acadia Healthcare (ACHC - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Acadia Healthcare due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Acadia Healthcare Q1 Earnings Beat on Higher Patient Volumes
Acadia Healthcare reported first-quarter 2023 adjusted earnings of 75 cents per share, which outpaced the Zacks Consensus Estimate by 5.6% and our estimate of 70 cents per share. The bottom line advanced 11.9% year over year.
Total revenues climbed 14.2% year over year to $704.3 million in the quarter under review. The top line beat the consensus mark by 4.2% and our estimate of $690.6 million.
The quarterly results benefited on the back of growing admissions as a result of sustained demand for its behavioral healthcare services. However, a significant rise in ACHC’s expense level might have partly offset the upside.
Q1 Operations
Total U.S. same-facility revenues of $694.9 million improved 13.3% year over year, thanks to a 6.4% rise in revenue per patient day and 6.5% growth in patient days. Admissions grew 8.6% year over year in the first quarter. However, the average length of stay declined 1.9% year over year.
In the overall U.S. facility, both revenue per patient day and patient days rose 6.9% year over year in the quarter under review. Admissions registered year-over-year growth of 10.4%. Yet, the average length of stay fell 3.2% year over year.
Adjusted EBITDA advanced 11.6% year over year to $151.3 million in the first quarter, higher than our estimate of $149.4 million. The adjusted EBITDA margin of 26.5% improved 20 basis points year over year.
Total expenses came in at $618.6 million, which escalated 15.1% year over year mainly due to higher salaries, wages and benefits, professional fees, depreciation and amortization and interest expenses. The figure also came higher than our estimate of $580.8 million.
Acadia Healthcare added 106 beds to its existing operations in the quarter under review.
Financial Update (as of Mar 31, 2023)
Acadia Healthcare exited the first quarter with cash and cash equivalents of $63.8 million, which dropped 34.6% from the figure at 2022 end. It had $485 million left under its $600 million revolving credit facility at the first-quarter end.
Total assets of $5,044.3 million inched up 1.1% from the 2022-end level.
Long-term debt amounted to $1,399.8 million, which increased 2.6% from the figure as of Dec 31, 2022. The current portion of the long-term debt was $21.3 million.
Total equity of $2,839.6 million inched up 1% from the 2022-end level. The net leverage ratio stood at around 2.2X at the first-quarter end.
In the reported quarter, net cash provided by operating activities of $44.4 million plunged 42.2% year over year.
2023 Outlook Reiterated
Revenues are anticipated to lie within $2.82-$2.88 billion, the midpoint of which indicates an improvement of 9.2% from the 2022 reported figure.
Acadia Healthcare is on track to add 300 beds to its existing facilities this year. It is also set to inaugurate a minimum of six comprehensive treatment centers in 2023.
Adjusted EBITDA is forecasted to stay between $635 million and $675 million, the midpoint of which suggests 6.5% growth from the 2022 figure.
Adjusted earnings per share is estimated in the $3.10-$3.40 band, the midpoint of which implies growth of 8% from the 2022 reported figure.
Interest expenses are predicted to be $80-$85 million for 2023, while the tax rate is expected within 25-26%.
Operating cash flows are anticipated to lie between $450 million and $500 million. Capital expenditures for expansion initiatives are estimated to stay between $350 million and $400 million, while the same for maintenance is projected to be $40-$50 million. IT capital expenditures are expected to stay in the $35-$45 million band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Acadia Healthcare has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.
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Acadia Healthcare (ACHC) Down 6.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Acadia Healthcare (ACHC - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Acadia Healthcare due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Acadia Healthcare Q1 Earnings Beat on Higher Patient Volumes
Acadia Healthcare reported first-quarter 2023 adjusted earnings of 75 cents per share, which outpaced the Zacks Consensus Estimate by 5.6% and our estimate of 70 cents per share. The bottom line advanced 11.9% year over year.
Total revenues climbed 14.2% year over year to $704.3 million in the quarter under review. The top line beat the consensus mark by 4.2% and our estimate of $690.6 million.
The quarterly results benefited on the back of growing admissions as a result of sustained demand for its behavioral healthcare services. However, a significant rise in ACHC’s expense level might have partly offset the upside.
Q1 Operations
Total U.S. same-facility revenues of $694.9 million improved 13.3% year over year, thanks to a 6.4% rise in revenue per patient day and 6.5% growth in patient days. Admissions grew 8.6% year over year in the first quarter. However, the average length of stay declined 1.9% year over year.
In the overall U.S. facility, both revenue per patient day and patient days rose 6.9% year over year in the quarter under review. Admissions registered year-over-year growth of 10.4%. Yet, the average length of stay fell 3.2% year over year.
Adjusted EBITDA advanced 11.6% year over year to $151.3 million in the first quarter, higher than our estimate of $149.4 million. The adjusted EBITDA margin of 26.5% improved 20 basis points year over year.
Total expenses came in at $618.6 million, which escalated 15.1% year over year mainly due to higher salaries, wages and benefits, professional fees, depreciation and amortization and interest expenses. The figure also came higher than our estimate of $580.8 million.
Acadia Healthcare added 106 beds to its existing operations in the quarter under review.
Financial Update (as of Mar 31, 2023)
Acadia Healthcare exited the first quarter with cash and cash equivalents of $63.8 million, which dropped 34.6% from the figure at 2022 end. It had $485 million left under its $600 million revolving credit facility at the first-quarter end.
Total assets of $5,044.3 million inched up 1.1% from the 2022-end level.
Long-term debt amounted to $1,399.8 million, which increased 2.6% from the figure as of Dec 31, 2022. The current portion of the long-term debt was $21.3 million.
Total equity of $2,839.6 million inched up 1% from the 2022-end level. The net leverage ratio stood at around 2.2X at the first-quarter end.
In the reported quarter, net cash provided by operating activities of $44.4 million plunged 42.2% year over year.
2023 Outlook Reiterated
Revenues are anticipated to lie within $2.82-$2.88 billion, the midpoint of which indicates an improvement of 9.2% from the 2022 reported figure.
Acadia Healthcare is on track to add 300 beds to its existing facilities this year. It is also set to inaugurate a minimum of six comprehensive treatment centers in 2023.
Adjusted EBITDA is forecasted to stay between $635 million and $675 million, the midpoint of which suggests 6.5% growth from the 2022 figure.
Adjusted earnings per share is estimated in the $3.10-$3.40 band, the midpoint of which implies growth of 8% from the 2022 reported figure.
Interest expenses are predicted to be $80-$85 million for 2023, while the tax rate is expected within 25-26%.
Operating cash flows are anticipated to lie between $450 million and $500 million. Capital expenditures for expansion initiatives are estimated to stay between $350 million and $400 million, while the same for maintenance is projected to be $40-$50 million. IT capital expenditures are expected to stay in the $35-$45 million band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Acadia Healthcare has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.