Acadia Healthcare Company, Inc. (NASDAQ:ACHC), is not the largest company out there, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$87.38 and falling to the lows of US$66.73. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Acadia Healthcare Company's current trading price of US$66.73 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Acadia Healthcare Company's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Acadia Healthcare Company Still Cheap?
Acadia Healthcare Company appears to be overvalued by 25% at the moment, based on our discounted cash flow valuation. The stock is currently priced at US$66.73 on the market compared to our intrinsic value of $53.32. This means that the opportunity to buy Acadia Healthcare Company at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Acadia Healthcare Company's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Acadia Healthcare Company generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. With revenues expected to grow by 31% over the next couple of years, the future seems bright for Acadia Healthcare Company. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? ACHC's optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe ACHC should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you've been keeping an eye on ACHC for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there's no upside from mispricing. However, the positive outlook is encouraging for ACHC, which means it's worth diving deeper into other factors in order to take advantage of the next price drop.
If you'd like to know more about Acadia Healthcare Company as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 2 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in Acadia Healthcare Company.
If you are no longer interested in Acadia Healthcare Company, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.