Acadia Healthcare (ACHC) Up 11% in 3 Months: More Room to Run?
Shares of Acadia Healthcare Company, Inc. ACHC have rallied 11.3% in the past three months compared with the industry’s 5.4% growth. The Medical sector and the S&P 500 composite index have gained 1.2% and 6.9%, respectively, in the same time frame. With a market capitalization of $7 billion, the average volume of shares traded in the last three months was 0.6 million.
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A strong U.S. business, growing patient volumes, joint ventures (JVs) with renowned healthcare organizations and a sound financial position continue to drive Acadia Healthcare.
The leading U.S. behavioral healthcare services provider with a current Zacks Rank #3 (Hold) has a decent track record of beating estimates in two of the trailing four quarters, matching the mark once and missing the same on the remaining one occasion, the average beat being 2.77%.
Can ACHC Retain the Momentum?
The Zacks Consensus Estimate for Acadia Healthcare’s 2023 earnings is pegged at $3.35 per share, which implies an improvement of 11.3% from the 2022 reported figure. The same for revenues stands at $2.9 billion, suggesting 10.3% growth from the year-ago figure. It has witnessed five upward estimate revisions compared to none for 2023 earnings over the past 30 days.
The consensus estimate for 2024 earnings is pegged at $3.72 per share, which indicates a rise of 11.2% from the 2023 estimate. The same for revenues stands at $3.1 billion, hinting at 9% growth from the 2023 estimate.
The top line of Acadia Healthcare continues to benefit on the back of growing patient volumes and operational efficiencies across its U.S. business. The solid growth potential of the U.S. business prompted ACHC to intensify focus on the unit and divest its underperforming businesses.
The continued incidence of mental health issues among Americans is expected to sustain the solid demand for behavioral healthcare services, which in turn, is likely to provide an impetus to ACHC’s performance in the days ahead. Management anticipates revenues within $2.86-$2.90 billion for 2023, the midpoint of which indicates a 10.3% rise from the 2022 figure.
Meanwhile, Acadia Healthcare boasts an impressive growth strategy pursuant to which it actively undertakes acquisitions and JVs. It has 20 JV partnerships in place, and the most recent one added to the list was that with Nebraska Methodist Health System to construct a 96-bed behavioral health facility in Iowa. Such initiatives continue to expand the facility and bed counts of ACHC and thus enable it to foray across U.S. communities grappling with inadequate care access.
The healthcare portfolio of Acadia Healthcare comprised 250 behavioral healthcare facilities located across 39 states and Puerto Rico as of Jun 30, 2023.
To pursue such uninterrupted growth-related initiatives, a solid financial position is of dire need. That’s exactly the case with Acadia Healthcare, which boasts a robust financial position backed by growing cash reserves and sufficient cash-generating abilities. As of Jun 30, 2023, its cash and cash equivalents rose 14.9% from the 2022-end level.
Stocks to Consider
Some better-ranked stocks in the Medical space are IRadimed Corporation IRMD, Medpace Holdings, Inc. MEDP and Progyny, Inc. PGNY. While IRadimed currently sports a Zacks Rank #1 (Strong Buy), Medpace and Progyny carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
IRadimed’s earnings surpassed estimates in each of the last four quarters, the average surprise being 12.83%. The Zacks Consensus Estimate for IRMD’s 2023 earnings indicates a rise of 26.4%, while the same for revenues suggests an improvement of 22% from the respective year-ago actuals The consensus mark for IRMD’s 2023 earnings has moved 6.1% north in the past 30 days.
The bottom line of Medpace beat estimates in each of the trailing four quarters, the average surprise being 22.28%. The Zacks Consensus Estimate for MEDP’s 2023 earnings indicates a rise of 12.9%, while the same for revenues suggests an improvement of 27.6% from the respective year-ago actuals. The consensus mark for MEDP’s 2023 earnings has moved 1.4% north in the past 30 days.
Progyny’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 96.25%. The Zacks Consensus Estimate for PGNY’s 2023 earnings indicates a surge of 66.7%, while the same for revenues suggests an improvement of 37.7% from the respective year-ago actuals. The consensus mark for PGNY’s 2023 earnings has moved 13.6% north in the past 30 days.
Shares of IRadimed and Medpace have gained 34.8% and 47.8%, respectively, in the past three months. However, the Progyny stock has lost 16.6% in the same time frame.
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Acadia Healthcare Company, Inc. (ACHC) : Free Stock Analysis Report
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