Addus Homecare (ADUS) AI Stock Analysis

• Market Cap: $1.83B
• Dividend Yield: N/A
• Average Volume (3M): 254.86K
• Price to Earnings (P/E): 23.8
• Beta (1Y): 0.40
• Revenue Growth: 9.06%
• EPS Growth: 10.68%
• Country: US
• Employees: 6,165
• Sector: Healthcare
• Sector Strength: 69
• Industry: Medical - Care Facilities
• EPS (TTM): 4.23
• Shares Outstanding: 18,172,865
• 10 Day Avg. Volume: 311,638
• 30 Day Avg. Volume: 254,858
• PEG Ratio: 2.23
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.41
• Price to Cash Flow (P/CF): 39.20
• P/FCF Ratio: 33.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $134.71
• Price Target Upside: 33.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

Addus Homecare benefits from strong financial performance and positive earnings call sentiment, supported by strategic growth through acquisitions. Nevertheless, technical indicators show bearish momentum, and high leverage poses a financial risk. The stock's moderate valuation and absence of a dividend suggest a focus on growth potential.

Positive Factors

Financial Performance

Revenue of $297.1M comfortably exceeded estimates on strength in Personal Care revenue.

Growth Strategy

The company remains committed to long-term revenue growth of over 10%, even on a larger base, and is focused on smaller transactions that fit its strategy.

Mergers and Acquisitions

Management remains constructive on acquisition opportunities, with expectations for more scaled clinical assets to come to market.

Negative Factors

Gross Margin Decline

Gross margin is expected to decline approximately 200 basis points quarter over quarter in 1Q.

Medicaid Policy Changes

Lingering uncertainty around potential Medicaid policy changes has negatively impacted the company's trading multiple for the year to date.

Quarterly Financial Impact

MDCD commentary and general unease over potential cuts overshadowed quarterly results, with ADUS shares trading off sharply.

Addus Homecare Business Overview & Revenue Model

Company Description

Addus HomeCare Corporation, together with its subsidiaries, provides personal care services to elderly, chronically ill, disabled persons, and individuals who are at risk of hospitalization or institutionalization in the United States. It operates through three segments: Personal Care, Hospice, and Home Health. The Personal Care segment provides non-medical assistance with activities of daily living. This segment offers services that include assistance with bathing, grooming, oral care, feeding and dressing, medication reminders, meal planning and preparation, housekeeping, and transportation services. The Hospice segment provides palliative nursing care, social work, spiritual counseling, homemaker, and bereavement counseling services for people who are terminally ill, as well as related services for their families. The Home Health segment offers skilled nursing and physical, occupational, and speech therapy for the individuals who requires assistance during an illness or after hospitalization. The company's payor clients include federal, state, and local governmental agencies; managed care organizations; commercial insurers; and private individuals. As of December 31, 2021, the company served consumers through 206 offices located in 22 states. Addus HomeCare Corporation was founded in 1979 and is based in Frisco, Texas.

How the Company Makes Money

Addus HomeCare makes money primarily through reimbursed healthcare services, which are funded by a combination of government programs and private pay sources. Key revenue streams include personal care services, which involve non-medical assistance with activities such as bathing, dressing, and meal preparation. This segment is largely reimbursed through Medicaid and other similar state-managed programs. In addition, the company earns revenue from its home health services, offering skilled nursing and therapy services, which are reimbursed by Medicare, Medicaid, and private insurance. Hospice care, another significant revenue stream, provides end-of-life care and is reimbursed through Medicare, Medicaid, and private insurance as well. Addus HomeCare's earnings are influenced by its ability to maintain contracts with state and federal programs, manage regulatory compliance, and expand its service network through strategic acquisitions and partnerships.

Addus Homecare Financial Statement Overview

Summary

Addus Homecare showcases strong revenue growth and healthy cash flow generation, with improving profit margins. However, the balance sheet presents a risk with high leverage and negative equity in 2024, indicating potential financial instability.

Income Statement

Addus Homecare demonstrated strong revenue growth, with a Revenue Growth Rate of 9.06% from 2023 to 2024. The Gross Profit Margin and Net Profit Margin have shown consistent improvement, reaching 32.48% and 6.37% in 2024, respectively. The EBIT Margin increased to 8.89%, indicating efficient cost management and operational profitability. These metrics reflect robust financial health and growth potential.

Balance Sheet

The company exhibits a high Debt-to-Equity Ratio due to negative equity in 2024, which is a concerning financial risk. The Return on Equity (ROE) is not meaningful due to negative equity. However, the company has managed its debt levels well historically, but the 2024 balance sheet indicates potential stability issues. The Equity Ratio fell to negative, highlighting significant financial leverage and risk.

Cash Flow

Addus Homecare shows a solid Free Cash Flow Growth Rate of 7.38% from 2023 to 2024, underscoring strong cash generation capabilities. The Operating Cash Flow to Net Income Ratio is robust, reflecting efficient cash operations. The Free Cash Flow to Net Income Ratio indicates that the company efficiently converts its earnings into cash. However, high investing outflows in 2024 could suggest aggressive growth strategies or capital expenditures.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.15B	1.06B	951.12M	864.50M	764.77M
	Gross Profit
375.02M	339.88M	299.74M	269.85M	226.24M
	EBIT
102.69M	90.96M	68.74M	65.94M	44.51M
	EBITDA
120.61M	106.56M	83.14M	80.70M	57.18M
	Net Income Common Stockholders
73.60M	62.52M	46.02M	45.13M	33.13M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	64.79M	79.96M	168.90M	145.08M
	Total Assets
1.41B	1.02B	937.99M	947.59M	892.58M
	Total Debt
3.22M	175.18M	178.05M	253.77M	230.39M
	Net Debt
3.22M	110.39M	98.09M	84.88M	85.31M
	Total Liabilities
442.14M	317.73M	304.45M	373.24M	373.91M
	Stockholders Equity
-2.58M	706.69M	633.54M	574.34M	518.68M
Cash Flow		Free Cash Flow
110.38M	102.79M	96.81M	34.84M	102.58M
	Operating Cash Flow
116.43M	112.25M	105.11M	39.49M	109.41M
	Investing Cash Flow
-354.61M	-119.24M	-106.59M	-42.02M	-214.24M
	Financing Cash Flow
272.30M	-8.18M	-87.45M	26.34M	138.19M

Addus Homecare Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 100.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADUS, the sentiment is Neutral. The current price of 100.85 is above the 20-day moving average (MA) of 96.49, below the 50-day MA of 102.41, and below the 200-day MA of 120.44, indicating a neutral trend. The MACD of -2.67 indicates Negative momentum. The RSI at 51.46 is Neutral, neither overbought nor oversold. The STOCH value of 92.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ADUS.

Addus Homecare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EHC	72 Outperform	$10.32B	22.91	24.52%	0.63%	11.91%	28.47%
CHE	70 Outperform	$8.67B	29.84	27.12%	0.32%	7.37%	11.17%
HUM	69 Neutral	$35.61B	29.55	7.40%	1.20%	10.70%	-49.85%
AMED	65 Neutral	$3.00B	70.28	3.93%	―	5.01%	―
ADUS	64 Neutral	$1.83B	23.82	8.78%	―	9.06%	10.68%
BKD	57 Neutral	$1.15B	―	-65.55%	―	3.95%	-5.53%
Sector *	48 Neutral	$6.35B	1.19	-46.26%	2.67%	19.24%	1.75%

Addus Homecare Corporate Events

Addus HomeCare Announces President’s Planned Retirement

On March 10, 2025, Addus HomeCare announced the planned retirement of W. Bradley Bickham, its President and COO, effective March 10, 2026. His retirement is amicable, and he will remain in his role for another year to ensure a smooth leadership transition. Additionally, Addus extended CEO R. Dirk Allison’s employment agreement for three more years, emphasizing the company’s commitment to stable leadership as it continues its growth strategy. The company also granted restricted shares to executives, aligning with its compensation plans.

Addus HomeCare Reports Strong Q4 2024 Financial Results

On February 24, 2025, Addus HomeCare Corporation announced its financial results for the fourth quarter and year ended December 31, 2024. The company reported a 7.5% increase in net service revenues for the quarter, reaching $297.1 million, and a 9.1% increase for the year, totaling $1.15 billion. The acquisition of Gentiva’s personal care operations significantly expanded Addus’s market coverage, contributing to its strategic growth. The company emphasized its strong financial performance, driven by robust demand for home-based care services and strategic acquisitions, positioning it well for continued growth in 2025.