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Can Rising Operating Costs Affect Acadia's (ACHC) Q4 Earnings?
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Acadia Healthcare Company, Inc. (ACHC - Free Report) is set to report its fourth-quarter 2023 results on Feb 27, after the closing bell.
Where Do the Estimates Stand?
The Zacks Consensus Estimate for fourth-quarter earnings per share of 80 cents suggests a 14.3% increase from the prior-year level of 70 cents. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of nearly $729 million indicates an 8% increase from the year-ago reported figure.
Acadia Healthcare beat the consensus estimate for earnings in three of the prior four quarters and missed on the other occasion, with the average surprise being 3.6%. This is depicted in the graph below:
Acadia Healthcare Company, Inc. Price and EPS Surprise
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at ACHC’s previous-quarter performance first.
Q3 Earnings Rewind
In the last reported quarter, this behavioral healthcare services provider’s adjusted earnings per share of 91 cents beat the Zacks Consensus Estimate by 3.4% on the back of growing patient admissions and continuous expansion initiatives. Solid demand for behavioral health and substance use treatment led to the increased utilization of ACHC’s treatment options. However, the upside was partly offset by a significant increase in expenses.
Acadia Healthcare’s fourth-quarter results are expected to be supported by growing patient days and admissions, reflecting rising demand for its services. Also, an increase in the average length of stay is expected to have aided its performance.
The Zacks Consensus Estimate and our model estimate for Acute Inpatient Psychiatric Facilities revenues indicate nearly 7% growth from a year ago. Our model estimate for Residential Treatment Centers revenues suggests a 3% year-over-year increase.
Furthermore, both the estimates for Specialty Treatment Facilities and Comprehensive Treatment Centers revenues are pegged at $154.5 million and $123.8 million, respectively, for the fourth quarter.
The Zacks Consensus Estimate and our model estimate for U.S. facility patient days suggest a nearly 2% growth from a year ago. The estimates for admissions hint at a 1% year-over-year increase. The estimates for the average length of stay in a U.S. facility suggest a 0.4% rise from the year-ago period.
The above-mentioned factors are expected to have positioned Acadia Healthcare for significant year-over-year growth. However, rising operating costs, along with higher utilization, are expected to have dampened the margins, affecting the growth rate and making an earnings beat uncertain. Our model predicts a nearly 7% year-over-year increase in total expenses.
Higher salaries, wages and benefits, professional fees, supplies costs, rent and leases and other operating expenses are expected to have pushed the total expenses up in the fourth quarter. We expect salaries, wages and benefits to have increased almost 4% in the to-be-reported quarter, along with a nearly 22% jump in professional fees.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Acadia Healthcare this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is 0.00%. This is because the Most Accurate Estimate is currently pegged at 80 cents per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Acadia Healthcare currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for Acadia Healthcare, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
The Zacks Consensus Estimate for Esperion Therapeutics’ bottom line for the to-be-reported quarter indicates a 30.3% improvement from the year-ago period. ESPR beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 7.5%.
Amarin Corporation plc (AMRN - Free Report) has an Earnings ESP of +42.86% and a Zacks Rank #3.
The Zacks Consensus Estimate for Amarin’s bottom line for the to-be-reported quarter improved by a penny over the past month. During this time, it has witnessed one upward revision against none in the opposite direction. AMRN beat earnings estimates in each of the past four quarters, with an average surprise of 175%.
argenx SE (ARGX - Free Report) has an Earnings ESP of +26.78% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for argenx’s earnings per share for the to-be-reported quarter has improved by 6 cents over the past month. During this time, it has witnessed three upward estimate revisions and no movement in the opposite direction. ARGX beat earnings estimates in three of the past four quarters and met once, with the average surprise being 42.7%.
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Can Rising Operating Costs Affect Acadia's (ACHC) Q4 Earnings?
Acadia Healthcare Company, Inc. (ACHC - Free Report) is set to report its fourth-quarter 2023 results on Feb 27, after the closing bell.
Where Do the Estimates Stand?
The Zacks Consensus Estimate for fourth-quarter earnings per share of 80 cents suggests a 14.3% increase from the prior-year level of 70 cents. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of nearly $729 million indicates an 8% increase from the year-ago reported figure.
Acadia Healthcare beat the consensus estimate for earnings in three of the prior four quarters and missed on the other occasion, with the average surprise being 3.6%. This is depicted in the graph below:
Acadia Healthcare Company, Inc. Price and EPS Surprise
Acadia Healthcare Company, Inc. price-eps-surprise | Acadia Healthcare Company, Inc. Quote
Before we get into what to expect for the to-be-reported quarter in detail, it’s worth taking a look at ACHC’s previous-quarter performance first.
Q3 Earnings Rewind
In the last reported quarter, this behavioral healthcare services provider’s adjusted earnings per share of 91 cents beat the Zacks Consensus Estimate by 3.4% on the back of growing patient admissions and continuous expansion initiatives. Solid demand for behavioral health and substance use treatment led to the increased utilization of ACHC’s treatment options. However, the upside was partly offset by a significant increase in expenses.
Now, let’s see how things have shaped up before the fourth-quarter earnings announcement.
Q4 Factors to Note
Acadia Healthcare’s fourth-quarter results are expected to be supported by growing patient days and admissions, reflecting rising demand for its services. Also, an increase in the average length of stay is expected to have aided its performance.
The Zacks Consensus Estimate and our model estimate for Acute Inpatient Psychiatric Facilities revenues indicate nearly 7% growth from a year ago. Our model estimate for Residential Treatment Centers revenues suggests a 3% year-over-year increase.
Furthermore, both the estimates for Specialty Treatment Facilities and Comprehensive Treatment Centers revenues are pegged at $154.5 million and $123.8 million, respectively, for the fourth quarter.
The Zacks Consensus Estimate and our model estimate for U.S. facility patient days suggest a nearly 2% growth from a year ago. The estimates for admissions hint at a 1% year-over-year increase. The estimates for the average length of stay in a U.S. facility suggest a 0.4% rise from the year-ago period.
The above-mentioned factors are expected to have positioned Acadia Healthcare for significant year-over-year growth. However, rising operating costs, along with higher utilization, are expected to have dampened the margins, affecting the growth rate and making an earnings beat uncertain. Our model predicts a nearly 7% year-over-year increase in total expenses.
Higher salaries, wages and benefits, professional fees, supplies costs, rent and leases and other operating expenses are expected to have pushed the total expenses up in the fourth quarter. We expect salaries, wages and benefits to have increased almost 4% in the to-be-reported quarter, along with a nearly 22% jump in professional fees.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Acadia Healthcare this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is 0.00%. This is because the Most Accurate Estimate is currently pegged at 80 cents per share, in line with the Zacks Consensus Estimate.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Acadia Healthcare currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
While an earnings beat looks uncertain for Acadia Healthcare, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Esperion Therapeutics, Inc. (ESPR - Free Report) has an Earnings ESP of +24.53% and is a Zacks #2 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Esperion Therapeutics’ bottom line for the to-be-reported quarter indicates a 30.3% improvement from the year-ago period. ESPR beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 7.5%.
Amarin Corporation plc (AMRN - Free Report) has an Earnings ESP of +42.86% and a Zacks Rank #3.
The Zacks Consensus Estimate for Amarin’s bottom line for the to-be-reported quarter improved by a penny over the past month. During this time, it has witnessed one upward revision against none in the opposite direction. AMRN beat earnings estimates in each of the past four quarters, with an average surprise of 175%.
argenx SE (ARGX - Free Report) has an Earnings ESP of +26.78% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for argenx’s earnings per share for the to-be-reported quarter has improved by 6 cents over the past month. During this time, it has witnessed three upward estimate revisions and no movement in the opposite direction. ARGX beat earnings estimates in three of the past four quarters and met once, with the average surprise being 42.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.