Leerink Partners analyst Whit Mayo has reiterated their bullish stance on ACHC stock, giving a Buy rating on November 3.
Whit Mayo has given a Buy rating to Acadia Healthcare due to a combination of factors.
The first quarter results of Acadia Healthcare were robust, surpassing revenue and EBITDA expectations. The company demonstrated double-digit organic growth, which was supported by strong demand and pricing, leading to a 13% increase in same-store revenues. Additionally, labor costs have seen a year-on-year moderation. Also, the company recorded $394m of expenses in accordance with a recent settlement, but this did not impact the EBITDA. Acadia Healthcare is leading the industry with double-digit organic revenue and EBITDA growth, policy formation tailwinds, and excellent visibility into future growth.
In the third quarter, Acadia Healthcare reported revenues of $750.3m, beating both consensus and estimates. The adjusted EBITDA, excluding CARES, of $175.9m also beat consensus by 1% but fell slightly short of the estimate. The company raised its 2023 revenue outlook to a range of $2.90 to $2.92 billion and narrowed EBITDA to $665 to $675 million. There was a 13% year-on-year increase in same-store revenues, with a 16% increase in same-store EBITDA excluding CARES funds. The company is on track with bed expansion and de novo targets. Labor costs have moderated, but other operating expenses have risen slightly. Overall, these factors make a compelling case for Acadia Healthcare’s Buy rating.
In another report released on November 3, Bank of America Securities also reiterated a Buy rating on the stock with a $100.00 price target.
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Acadia Healthcare (ACHC) Company Description:
Acadia Healthcare Co., Inc. engages in the provision of behavioral healthcare services. It operates through the following segments: United States (U.S.) Facilities and the United Kingdom (U.K.) Facilities. The U.S. Facilities segment classified in the following categories: acute inpatient psychiatric facilities; specialty treatment facilities; residential treatment centers; and outpatient community-based services. The U.K. Facilities segment provides inpatient services through facilities, including mental health hospitals, clinics, care homes, schools, colleges, and children’s homes. The company was founded in January 2005 and is headquartered in Franklin, TN.
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