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Adapthealth (AHCO)
:AHCO
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AdaptHealth
(NASDAQ:AHCO)
68Neutral
Positive Factors
Financial Performance
AHCO had a very strong 4Q with a revenue beat and a significant EBITDA beat.
Strategic Initiatives
AHCO entered into an agreement to sell additional non-core assets within its new 'Wellness at Home' segment.
Negative Factors
Diabetes Business Performance
AHCO has really struggled to manage its diabetes franchise, and another cut to numbers doesn't increase confidence.
AdaptHealth (AHCO) vs. S&P 500 (SPY)
Market Cap
$1.36B
Dividend YieldN/A
Average Volume (3M)1.64M
Price to Earnings (P/E)16.7
Beta (1Y)1.27
Revenue Growth1.90%
EPS GrowthN/A
CountryUS
Employees10,700
SectorHealthcare
Sector Strength78
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)0.60
Shares Outstanding134,867,000
10 Day Avg. Volume2,050,087
30 Day Avg. Volume1,640,982
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.46
Price to Cash Flow (P/CF)2.30
P/FCF Ratio1.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$13.86Price Target Upside36.96% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
AdaptHealth Business Overview & Revenue Model
Company DescriptionAdaptHealth (AHCO) is a leading provider of home healthcare equipment, medical supplies, and related services in the United States. The company specializes in offering a comprehensive range of products, including respiratory therapy, sleep therapy, diabetes management supplies, mobility equipment, and other home medical equipment. AdaptHealth serves a diverse customer base, including patients, healthcare professionals, and insurance providers, with a focus on improving patient outcomes and enhancing the quality of life for individuals with chronic conditions.
How the Company Makes MoneyAdaptHealth generates revenue primarily through the sale and rental of home healthcare equipment and medical supplies. The company's key revenue streams include direct sales to patients and healthcare providers, rental income from equipment provided to patients for home use, and reimbursements from insurance companies, Medicare, and Medicaid. AdaptHealth also benefits from partnerships with healthcare providers and hospitals, which help expand its customer base and distribution network. Additionally, the company may engage in strategic acquisitions to enhance its product offerings and geographic reach, contributing to its overall earnings.
AdaptHealth Financial Statement Overview
Summary
AdaptHealth has shown robust revenue growth and improved operational efficiency, as evidenced by positive trends in gross profit and EBIT margins. However, the balance sheet still shows room for enhancement, despite improvements in stockholders' equity and leverage ratios. Cash flow metrics are healthy, reflecting strong cash generation relative to earnings.Income Statement
AdaptHealth has shown strong revenue growth, with Total Revenue increasing consistently over the years. The Gross Profit Margin has improved significantly, reaching 100% in the latest annual data, indicating effective cost management. However, the Net Profit Margin has fluctuated, with recent improvements visible in the latest year. Despite past negative EBIT figures, recent positive EBIT and EBITDA margins suggest improved operational efficiency.75
Positive
Balance Sheet
The company's balance sheet shows an improving equity position, with Stockholders' Equity increasing in recent years. The Debt-to-Equity Ratio has decreased, indicating reduced leverage and risk. However, the Equity Ratio remains moderate, suggesting room for strengthening the equity base further. The Return on Equity (ROE) has been volatile but showed improvement in the latest period due to rising net income.65
Positive
Cash Flow
AdaptHealth's cash flow has improved, with a significant increase in Operating Cash Flow and positive Free Cash Flow in the latest year. The Free Cash Flow to Net Income Ratio is healthy, indicating efficient cash generation relative to earnings. The company has managed to maintain a positive Operating Cash Flow to Net Income Ratio, showing effective cash flow management despite past volatility in net income.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.26B | 3.20B | 2.97B | 2.45B | 1.06B | Gross Profit |
| 681.09M | 479.56M | 417.43M | 445.61M | 161.23M | EBIT |
| 263.73M | -598.40M | 190.41M | 225.60M | 74.79M | EBITDA |
| 303.37M | -171.09M | 630.76M | 483.66M | -82.17M | Net Income Common Stockholders |
| 90.42M | -678.89M | 69.32M | 156.18M | -58.72M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 109.75M | 77.13M | 46.27M | 149.63M | 99.96M | Total Assets |
| 4.49B | 4.51B | 5.22B | 5.25B | 1.83B | Total Debt |
| 165.41M | 2.29B | 2.33B | 2.37B | 807.00M | Net Debt |
| 55.67M | 2.22B | 2.28B | 2.22B | 707.03M | Total Liabilities |
| 2.91B | 3.04B | 3.06B | 3.18B | 1.43B | Stockholders Equity |
| 1.57B | 1.46B | 2.16B | 2.07B | 394.75M |
| Cash Flow | Free Cash Flow | |||
| 235.78M | 143.20M | -17.56M | 72.37M | 155.88M | Operating Cash Flow |
| 541.84M | 480.67M | 373.87M | 275.68M | 195.63M | Investing Cash Flow |
| -310.27M | -357.28M | -411.17M | -1.82B | -815.70M | Financing Cash Flow |
| -198.95M | -92.53M | -66.05M | 1.60B | 643.15M |
AdaptHealth Technical Analysis
Neutral
10.12
Price Trends
10.00
Positive
10.06
Positive
10.31
Negative
Market Momentum
0.20
Negative
50.00
Neutral
20.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AHCO, the sentiment is Neutral. The current price of 10.12 is above the 20-day moving average (MA) of 9.86, above the 50-day MA of 10.00, and below the 200-day MA of 10.31, indicating a neutral trend. The MACD of 0.20 indicates Negative momentum. The RSI at 50.00 is Neutral, neither overbought nor oversold. The STOCH value of 20.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AHCO.
AdaptHealth Risk Analysis
AdaptHealth disclosed 46 risk factors in its most recent earnings report. AdaptHealth reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AdaptHealth Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $2.89B | 209.44 | 2.40% | ― | 4.74% | -39.28% | |
72 Outperform | $9.98B | 22.26 | 24.52% | 0.64% | 11.91% | 28.47% | |
70 Outperform | $8.76B | 30.01 | 27.12% | 0.32% | 7.37% | 11.17% | |
68 Neutral | $1.36B | 16.73 | 5.45% | ― | 1.90% | ― | |
66 Neutral | $3.02B | 70.68 | 3.93% | ― | 5.01% | ― | |
61 Neutral | $1.72B | 22.37 | 8.78% | ― | 9.06% | 10.68% | |
49 Neutral | $6.90B | -0.08 | -53.01% | 2.43% | 24.84% | -3.06% |
* Healthcare Sector Average
Performance Comparison
AHCO
AdaptHealth
10.12
-0.24
-2.32%
ADUS
Addus Homecare
94.71
-4.39
-4.43%
AMED
Amedisys
92.09
-1.16
-1.24%
CHE
Chemed
598.50
-45.92
-7.13%
EHC
Encompass Health
96.99
21.42
28.34%
PRVA
Privia Health Group
23.96
3.24
15.64%
AdaptHealth Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: 18.36% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
AdaptHealth demonstrated notable achievements by exceeding financial guidance and reducing debt significantly, while also extending a major capitated contract with Humana. However, challenges remain with the Diabetes Health segment continuing to decline and flat overall revenue growth. The outlook for 2025 includes potential negative growth, though efforts to improve segments and operational performance are underway.Highlights
Exceeded Financial Guidance
Revenue, adjusted EBITDA, and free cash flow exceeded the high end of guidance ranges for Q4 2024.
Segment Revenue Growth
Sleep Health revenue increased by 3.4% and Respiratory Health by 1% year-over-year in Q4 2024.
Strong Free Cash Flow
Q4 2024 free cash flow was $73 million, up 10% from the prior year quarter.
Debt Reduction
Reduced debt by $170 million in 2024, including a $50 million reduction in Q4, with a net leverage ratio of 2.8x.
Capitated Contract Extension
Extended a multi-year capitated contract with Humana, indicating strong performance and confidence in the company's management of patient care.
Lowlights
Diabetes Health Segment Decline
Diabetes Health revenue declined 7.3% in Q4 2024, with ongoing challenges in managing patient interactions and attrition rates.
Narrowed Adjusted EBITDA Margin
Q4 2024 adjusted EBITDA margin contracted to 23.4% from 23.8% in the prior year quarter.
Flat Overall Revenue
Q4 2024 revenue was effectively flat compared to the prior year quarter.
Guidance for 2025
2025 revenue guidance indicates potential negative growth of up to 1%, with ongoing weakness expected in the Diabetes Health segment.
Company Guidance
During the AdaptHealth Fourth Quarter 2024 Earnings Release call, the company reported that key financial metrics such as revenue, adjusted EBITDA, and free cash flow all exceeded the high end of their guidance ranges for the fourth quarter. The company achieved a revenue growth of 3% above the midpoint of their Q4 guidance range, with the Sleep Health and Respiratory Health segments growing by 3.4% and 1%, respectively. However, the Diabetes Health segment saw a decline of 7.3%. The adjusted EBITDA margin was slightly narrower at 23.4% compared to 23.8% in the prior year quarter, while free cash flow increased to $73 million, up 10% year-over-year. AdaptHealth also highlighted their strategic focus on initiatives such as the One Adapt program and the application of AI and automation, with the aim of enhancing service quality and operational efficiency. The company announced a multi-year extension of their capitated contract with Humana and noted a reduction in their net leverage ratio to 2.8x, following a $170 million debt reduction over the year. For 2025, AdaptHealth guided for revenue in the range of $3.22 billion to $3.36 billion, with an expected adjusted EBITDA margin of approximately 21% and free cash flow between $180 million to $220 million.AdaptHealth Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
AdaptHealth Amends Agreement to Cut Executive Salary
Neutral
Dec 13, 2024
AdaptHealth Corp. announced an amendment to its agreement with Shaw Rietkerk, the Chief Business Officer, effectively reducing his annual base salary from $500,000 to $125,000 starting January 1, 2025. This move highlights potential cost-saving initiatives and strategic financial adjustments within the company, which could impact its operational efficiency and stakeholder relations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.