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Acadia Healthcare (ACHC) Up 5.2% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Acadia Healthcare (ACHC - Free Report) . Shares have added about 5.2% 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 Q3 Earnings Miss

Acadia Healthcare reported third-quarter 2019 adjusted earnings of 52 cents per share, missing the Zacks Consensus Estimate by 1.89% and declining 5.5% year over year.

Quarterly  Details

Revenues of Acadia Healthcare rose 2% year over year to $777.2 million, but missed the Zacks Consensus Estimate by 1.1% year over year.

Total same facility revenues grew 4.6% with 1.1% increase in patient days and 3.5% rise in revenues per patient day.

U.S. same facility revenues were up 4.9% year over year to $498.1 million. The segment also recorded 2.8% year-over-year increase in patient days and 2% growth in revenues per patient day.

U.K. same facility revenues rose 4% year over year to $243.9 million. The number of patient days declined 1.1% from the year-earlier period whereas revenues per patient per day were up 5.1%.

Consolidated EBITDA margin was 22.9%, down 100 basis points year over year.

Total expenses increased 3.1% year over year to $727.8 million due to higher salaries, professional fees, supplies, interest expenses, depreciation and amortization as well as rents and leases.

In the reported quarter, the company added 82 beds in total.

Financial Update

Cash and cash equivalents as of Sep 30, 2019 were $92.9 million, up 84% from the 2018 end  level.

Long-term debt was $3.13 billion as of Sep 30, 2019, down 0.8% from year-end 2018 level.

Net cash provided by operating activities for the nine months ended Sept 30, 2019 was $213.5 million, down 26% year over year.
2019 Guidance

For 2019, the company expects adjusted earnings per share between $2 and $2.05 on revenues of $3.10-$3.125 billion.
Adjusted EBITDA is anticipated between $584 million and $589 million.

The company expects to add 650 beds to existing and new facilities.
 

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -13.8% due to these changes.

VGM Scores

Currently, Acadia Healthcare has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, 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 B. 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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