Addus Homecare: Hold Rating Amid CMS Rate Updates and Medicaid Reform Uncertainties

Analyst Sean Dodge of BMO Capital maintained a Hold rating on Addus Homecare, retaining the price target of $120.00.

Sean Dodge has given his Hold rating due to a combination of factors influencing Addus Homecare’s market position. The recent update from CMS regarding home health Medicare rates was a significant positive development, but the ongoing uncertainty around the $4.7 billion clawback remains a concern for the sector. Although home health represents less than 5% of Addus’s revenue, the company is cautious about expanding in this area until there is more clarity on future CMS rate adjustments.
Additionally, while there are opportunities for growth through organic means and mergers and acquisitions, the uncertainty surrounding Medicaid reforms poses a potential risk to valuation. Sean Dodge believes that while the impact of Medicaid changes should be minimal, the regulatory uncertainties could continue to affect the stock’s valuation. Therefore, a more favorable rating might be considered once these uncertainties are resolved or if there is a significant pullback in stock price.

According to TipRanks, Dodge is an analyst with an average return of -7.0% and a 39.58% success rate. Dodge covers the Healthcare sector, focusing on stocks such as Addus Homecare, Veeva Systems, and Privia Health Group.