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Accendra Health (ACH)
NYSE:ACH
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Accendra Health
(NYSE:ACH)
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Rating:48Neutral
Price Target:
$2.50
▲(3.31% Upside)
Action:ReiteratedDate:02/20/26
ACH scores low primarily due to weak and deteriorating financial performance (large losses, cash burn, and negative equity). The earnings call provides some offset via debt reduction, liquidity, and a free-cash-flow plan, but near-term guidance is down due to the ~$300M payer headwind. Technicals are mixed (short-term stabilization but weak long-term trend), and valuation remains challenged given the negative P/E and no dividend yield data.
Positive Factors
Divestiture and strategic focus
The completed divestiture materially simplifies the company into a focused home-based care operator and provided $342M of proceeds used to deleverage. A narrower, higher-margin core business enhances operational clarity, improves margin recovery prospects, and increases strategic flexibility over the medium term.
Improved continuing-ops cash generation
Sustained positive cash generation from continuing operations and a public target of at least $100M levered free cash flow at the midpoint indicate a structural shift toward cash-positive performance. Reliable FCF supports debt repayment, funds tech investments, and reduces reliance on external financing over 2–3 quarters.
Debt reduction and liquidity
Meaningful reduction in net debt and available committed liquidity materially improve near-term financial flexibility and lower interest burden. Combined with a stated long-range ~3x leverage target, this creates a concrete framework for deleveraging that should persistently improve credit standing and capital allocation options.
Negative Factors
Large commercial payer contract loss
A structural loss of ~ $300M of contracted revenue materially shrinks the revenue base and increases execution risk for replacement volumes. This headwind depresses scale economics, extends the timeline to restore adjusted EBITDA and free cash flow, and forces greater reliance on cost cuts and successful remediation initiatives.
Negative stockholders' equity
Negative equity is a deep balance-sheet impairment that constrains capital-raising options, may trigger covenant or rating pressure, and reduces strategic optionality. It makes leverage metrics misleading and elevates refinancing and liquidity risk until equity is rebuilt via earnings, asset sales, or capital injections.
Sharp revenue decline and operating losses
A near-30% revenue contraction and deep operating losses signal structural demand or contract problems and a weakened cost base. Persistent negative margins consume cash and impede reinvestment; restoring sustainable profitability requires durable revenue recovery and lasting margin improvements from pricing or efficiency gains.
Accendra Health (ACH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$203.32M
Dividend YieldN/A
Average Volume (3M)1.12M
Price to Earnings (P/E)―
Beta (1Y)0.90
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees23,200
SectorHealthcare
Sector Strength45
IndustryMedical - Distribution
Share Statistics
EPS (TTM)0.21
Shares Outstanding76,436,810
10 Day Avg. Volume949,424
30 Day Avg. Volume1,122,390
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)-0.47
Price to Sales (P/S)0.08
P/FCF Ratio-0.74
Enterprise Value/Market Cap10.51
Enterprise Value/Revenue0.45
Enterprise Value/Gross Profit1.46
Enterprise Value/Ebitda9.09
Forecast
1Y Price Target
$2.83Price Target Upside16.94% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)0.6
Revenue Forecast (FY)$2.62B
Accendra Health Business Overview & Revenue Model
Company DescriptionAccendra Health, Inc., together with its subsidiaries, operates as a healthcare solutions company worldwide. The company operates in two segments, Products & Healthcare Services and Patient Direct. The Products & Healthcare Services segment offers a portfolio of products and services to healthcare providers and manufacturers. Its portfolio of medical and surgical supplies includes branded products and its proprietary products. This segment also offers services to healthcare providers, including supplier management, analytics, inventory management, and clinical supply management; and various programs to provide outsourced logistics and marketing solutions to its suppliers. The Patient Direct segment provides products and services for in-home care and delivery across diabetes treatment, home respiratory therapy, and obstructive sleep apnea treatment. This segment also supplies a range of other home medical equipment; and patient care products, including ostomy, wound care, urology, and incontinence and other products and services. The company serves multi-facility networks of healthcare providers, independent hospitals, surgery centers, physicians' practices, and networks of hospitals directly, as well as indirectly through third-party distributors. Accendra Health, Inc. was formerly known as Owens & Minor, Inc. and changed its name Accendra Health, Inc. in December 2025. The company was founded in 1882 and is based in Glen Allen, Virginia.
How the Company Makes Money
Accendra Health Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 01, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: structurally positive strategic actions and improving cash generation following the divestiture (completed sale proceeds, strong continuing-operations cash flow, debt reduction, a clear deleveraging target and targeted technology investments). However, material near-term challenges remain — most notably the large commercial payer contract loss (~$300M headwind in 2026), margin pressure from inflationary product costs and one-time separation and stranded costs — which depress near-term revenue and adjusted EBITDA guidance. Management outlined clear remediation actions (cost reduction, technology, preferred agreements and capital structure optimization) and expects improvements over 2026 and into 2027, resulting in a neutral overall outlook in the near term while leaving upside potential if replacement volume and cost initiatives succeed.Q4-2025 Updates
Positive Updates
Completed Strategic Divestiture
Sold Products & Healthcare Services (Owens & Minor) to Platinum Equity on December 31, 2025; received $342 million of net proceeds at closing with an expected additional $12–15 million of purchase price adjustments, enabling a leaner, higher-margin pure-play home-based care company and enabling immediate use of proceeds to reduce debt (including $66 million to settle PNHS-related AR securitization).
Full-Year Revenue Growth
2025 consolidated revenue was nearly $2.8 billion, up a little more than 3% year-over-year, driven by growth in sleep therapy, ostomy and urology categories.
Strong Sleep Category Performance
Sale of sleep supplies grew in the range of 8%–9% both for the fourth quarter and the full year 2025, driven by the 'Sleep Journey' initiative and recurring revenue capture.
Improved Cash Generation from Continuing Operations
Continuing operations generated $135 million of operating cash flow in Q4 2025 (company-wide Q4 operating cash flow $68 million including discontinued ops). For full-year 2025 continuing ops generated $154 million of cash from operations; free cash flow from continuing ops was $18 million in Q4 and $98 million for the year. Guidance midpoint targets at least $100 million of free cash flow for 2026.
Material Debt Reduction and Liquidity
Net debt at December 31, 2025 was $1.8 billion — down $315 million from September 30 and down $46 million year-over-year. Company ended year with ~$282 million of cash, ~ $220 million available under committed revolver and $16 million under amended AR securitization, and a stated long-range leverage target of 3x adjusted EBITDA.
2026 Adjusted EBITDA Guidance and Seasonal Improvement
Management guided 2026 adjusted EBITDA of $335 million to $355 million (midpoint ~$345 million) and expects ~60% of adjusted EBITDA to be realized in the second half of 2026 as cost takeouts ramp, replacement volumes build and stranded costs decline.
Operational & Technology Initiatives
Investments in automation (payer qualification automation), revenue cycle improvements and customer-facing technology (MyApria app launching Q2 2026, building on MyByram) aimed at improving collection rates, patient adherence and lowering cost to serve.
Negative Updates
Significant Large Commercial Payer Contract Loss
A previously disclosed loss and price impact from a large commercial payer reduced Q4 revenue by ~1% relative to what would have been >3% growth. Management expects the aggregate impact to be approximately $300 million of incremental revenue reduction in 2026 vs 2025 and an additional ~$40 million in 2027, with the company not fully replacing that volume and expecting to fully lap the impact by end of Q1 2027.
Quarterly Adjusted EBITDA Decline
Fourth quarter 2025 adjusted EBITDA was $90 million versus $102.5 million in Q4 2024, a decline of approximately 12.2% year-over-year; the decline was driven by lower payment prices, inflationary product cost increases, higher health benefit costs and stranded costs.
Inflationary Product Costs and Pricing Pressure
Margin pressure from inflationary product cost increases and lower payment prices across major categories was cited as a headwind; management noted this is present in several major categories and is being addressed via manufacturer negotiations and pricing models.
Weaker Collection Rate Compared with 2024
A somewhat weaker collection rate versus a strong 2024 inhibited top-line growth in 2025; management attributes prior-year pullback largely to technology investments and expects collections to improve in 2026 as systems mature.
Stranded, Separation and One-Time Costs
Stranded costs totaled $12 million in Q4 and $36.5 million for the full year 2025; continuing-operations cash flow included $98 million in cash costs to terminate the Rotech acquisition and separation-related outlays tied to the divestiture, reducing available free cash flow in 2026.
Near-Term Guidance Reflects Revenue & EBITDA Headwinds
2026 revenue guidance of $2.55 billion to $2.65 billion represents a decline versus 2025 (~$2.8 billion), and adjusted EBITDA guidance ($335M–$355M) is lower than 2025 adjusted EBITDA ($375M), indicating near-term pressure despite remediation plans; management expects Q1 2026 to be the weakest quarter.
High Ongoing Capital Intensity for Patient Equipment
Patient equipment CapEx was $45 million in Q4 and $189 million for 2025; management expects patient CapEx to represent roughly 95% of total CapEx going forward, which sustains a meaningful capital requirement in the business model.
Company Guidance
The company guided 2026 net revenue of $2.55–$2.65 billion and adjusted EBITDA of $335–$355 million, with levered free cash flow at the midpoint of the plan of at least $100 million; management said the loss of a large commercial payer will reduce 2026 revenue by roughly $300 million versus 2025 (about $40 million more in 2027) with ~15% of that reduction in Q1 and 25–30% in each of Q2–Q4, and noted they expect to fully lap the impact by the end of Q1 2027. For context, 2025 revenue was ~$2.8 billion (up ~3%), adjusted EBITDA was $375 million (Q4 adj. EBITDA $90 million), Q4 free cash flow was $18 million and FY free cash flow $98 million; patient CapEx was $45 million in Q4 and $189 million for 2025 (expected to be ~95% of total CapEx going forward). Balance sheet metrics: net debt $1.8 billion (down $315 million from Sept. 30), cash $282 million at 12/31 plus ~$220 million revolver capacity and $16 million AR securitization availability, $342 million divestiture proceeds received (with an additional ~$12–$15 million expected), and a long‑range leverage target of ~3x adjusted EBITDA.Accendra Health Financial Statement Overview
Summary
Financial statements indicate significant stress: steep TTM revenue decline (~29.6%), very large net loss (net margin about -23%), and both operating cash flow and free cash flow meaningfully negative. The balance sheet is a major concern with negative stockholders’ equity in TTM, despite lower reported debt; overall trends have deteriorated from modest profitability/stronger cash generation in prior years to a severe TTM reset.Income Statement
TTM (Trailing-Twelve-Months) shows a sharp deterioration: revenue fell ~29.6% and the company posted a very large net loss (net margin about -23%), despite a solid gross margin (~25%). Profitability has also compressed versus prior years—annual results moved from modest profitability in 2020–2022 to losses in 2023–2024, culminating in the outsized TTM loss. The main strength is relatively stable gross profitability, but operating profitability is weak and the earnings trajectory is clearly negative.18
Very Negative
Balance Sheet
The balance sheet weakened materially: TTM stockholders’ equity is negative (vs. positive equity in 2020–2024), which is a major credit and flexibility concern and makes leverage metrics less meaningful (debt-to-equity turns negative due to negative equity). While total debt is much lower in TTM than in 2024, the negative equity and deeply negative return on equity in TTM signal significant balance-sheet stress. Prior years already showed elevated leverage (debt-to-equity ~2.6–3.8 in 2022–2024), so the capital structure has been under pressure even before the TTM drop.12
Very Negative
Cash Flow
Cash generation has turned negative in TTM: operating cash flow and free cash flow are both meaningfully negative, reversing the strong cash performance seen in 2022–2023 (when free cash flow was positive). A partial positive is that free cash flow decline is not as severe as the net loss in TTM (free cash flow is less negative than net income), but the business is currently consuming cash, and 2024 already showed weak free cash flow (slightly negative) despite positive operating cash flow.22
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.76B | 10.70B | 10.33B | 9.96B | 9.79B |
| Gross Profit | 1.20B | 2.22B | 2.13B | 1.83B | 1.51B |
| EBITDA | 241.77M | 51.22M | 390.57M | 368.45M | 415.46M |
| Net Income | -1.10B | -362.69M | -41.30M | 22.39M | 221.59M |
Balance Sheet | |||||
| Total Assets | 2.45B | 4.66B | 5.09B | 5.39B | 3.54B |
| Cash, Cash Equivalents and Short-Term Investments | 281.99M | 49.38M | 243.04M | 69.47M | 55.71M |
| Total Debt | 2.23B | 2.14B | 2.41B | 2.79B | 1.15B |
| Total Liabilities | 2.91B | 4.09B | 4.17B | 4.44B | 2.60B |
| Stockholders Equity | -460.98M | 565.23M | 924.17M | 945.60M | 938.50M |
Cash Flow | |||||
| Free Cash Flow | -292.75M | -66.67M | 532.82M | 158.42M | 74.49M |
| Operating Cash Flow | -101.79M | 161.50M | 740.71M | 325.01M | 124.18M |
| Investing Cash Flow | 144.42M | -116.53M | -137.25M | -1.80B | -53.63M |
| Financing Cash Flow | 188.08M | -267.60M | -417.33M | 1.50B | -129.48M |
Accendra Health Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
Performance Comparison
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.