AdaptHealth (AHCO) AI Stock Analysis

• Market Cap: $1.19B
• Dividend Yield: N/A
• Average Volume (3M): 1.81M
• Price to Earnings (P/E): 14.5
• Beta (1Y): 0.97
• Revenue Growth: 1.90%
• EPS Growth: N/A
• Country: US
• Employees: 10,500
• Sector: Healthcare
• Sector Strength: 58
• Industry: Medical - Devices
• EPS (TTM): 0.60
• Shares Outstanding: 134,867,000
• 10 Day Avg. Volume: 1,780,025
• 30 Day Avg. Volume: 1,813,638
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.80
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.89
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $13.44
• Price Target Upside: 58.12% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

AdaptHealth shows promising financial performance improvements, especially in revenue growth and cash flow management. However, technical indicators reflect bearish sentiment, and valuation is moderate with no dividend yield. The earnings call highlighted successful debt reduction and strategic initiatives but also noted challenges in certain segments and a cautious 2025 outlook.

Positive Factors

Earnings and Guidance

Shares have made up almost all February's pullback on 4Q results that included healthy revenue upside and an impressive adj-EBITDA beat, both above guidance.

Financial Performance

AHCO reported a strong free cash flow of $73 million in Q4, representing a 10% year-over-year growth.

Strategic Changes

AHCO entered into an agreement to sell additional non-core assets within its new 'Wellness at Home' segment.

Negative Factors

Diabetes Business Challenges

AHCO's diabetes business remains pressured, with management expecting declines in revenues through 2025, impacting EBITDA growth.

Diabetes Performance

Diabetes declined ~12% year-over-year driven by lower CGM growth.

Revenue Outlook

AHCO lowered its 2024 revenue outlook by 0.9% at the midpoint.

AdaptHealth Business Overview & Revenue Model

Company Description

AdaptHealth Corp., together with its subsidiaries, provides home medical equipment (HME), medical supplies, and home and related services in the United States. The company provides sleep therapy equipment, supplies, and related services, such as CPAP and bi-PAP services to individuals suffering from obstructive sleep apnea; medical devices and supplies, including continuous glucose monitors and insulin pumps to patients for the treatment of diabetes; HME to patients discharged from acute care and other facilities; oxygen and related chronic therapy services in the home; and other HME devices and supplies on behalf of chronically ill patients with wound care, urological, incontinence, ostomy, and nutritional supply needs. It serves beneficiaries of Medicare, Medicaid, and commercial insurance payors. AdaptHealth Corp. is headquartered in Plymouth Meeting, Pennsylvania.

How the Company Makes Money

AdaptHealth 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 demonstrates robust financial health with strong revenue growth and improved operational efficiencies. Despite fluctuating net profit margins and moderate equity ratios, there is a promising outlook with recent positive trends in income and cash flow metrics.

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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 8.50
• 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 AHCO, the sentiment is Neutral. The current price of 8.5 is above the 20-day moving average (MA) of 8.46, below the 50-day MA of 9.55, and below the 200-day MA of 10.11, indicating a neutral trend. The MACD of -0.35 indicates Negative momentum. The RSI at 49.84 is Neutral, neither overbought nor oversold. The STOCH value of 91.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AHCO.

AdaptHealth Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UFPT	73 Outperform	$1.64B	27.96	18.76%	―	26.08%	30.54%
AHCO	64 Neutral	$1.19B	14.52	5.45%	―	1.90%	―
LIVN	54 Neutral	$2.00B	32.03	4.87%	―	8.33%	256.54%
Sector *	52 Neutral	$5.36B	3.88	-42.93%	2.87%	17.85%	1.45%
BVS	49 Neutral	$595.45M	―	-20.86%	―	11.89%	79.18%
ESTA	46 Neutral	$897.31M	―	-236.67%	―	0.53%	2.23%
SENS	41 Neutral	$464.49M	―	-166.29%	―	0.37%	-20.49%

AdaptHealth Corporate Events

AdaptHealth Amends Agreement to Cut Executive Salary

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.