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Adapthealth (AHCO)
:AHCO
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AdaptHealth
(NASDAQ:AHCO)
Rating:65Neutral
Price Target:
$9.50
▲( 8.20% Upside)
Positive Factors
Diabetes segment progress
Diabetes continues to show signs of early progress, exceeding internal targets for the quarter.
Free cash flow growth
AHCO reported a strong free cash flow of $73 million in Q4, representing a 10% year-over-year growth.
Non-core asset sales
AHCO continues to deliver on initiatives to strategically divest ~$100m of annual revenues with non-core asset sales.
Negative Factors
EBITDA margin decline
EBITDA margin declined to 16.4%, showing a decrease of 360 basis points year over year.
Revenue and EBITDA outlook
AHCO lowered its 2025 revenue outlook and EBITDA forecast, partially due to the new asset sale announcement.
Sleep segment challenges
New challenges in sleep entered the picture this quarter, with competitors gaining share in a few states.
AdaptHealth (AHCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.18B
Dividend YieldN/A
Average Volume (3M)1.63M
Price to Earnings (P/E)15.5
Beta (1Y)0.95
Revenue Growth-0.05%
EPS GrowthN/A
CountryUS
Employees10,500
SectorHealthcare
Sector Strength43
IndustryMedical - Devices
Share Statistics
EPS (TTM)0.03
Shares Outstanding134,947,900
10 Day Avg. Volume950,127
30 Day Avg. Volume1,633,535
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)0.73
Price to Sales (P/S)0.00
P/FCF Ratio4.91
Enterprise Value/Market Cap2.68
Enterprise Value/Revenue0.24
Enterprise Value/Gross Profit4.83
Enterprise Value/Ebitda5.93
Forecast
1Y Price Target
$13.07Price Target Upside48.86% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
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 demonstrates robust financial health and growth potential, particularly in revenue and operational efficiencies. While there are areas for improvement in balance sheet strength and consistent profitability, the recent positive trends in income and cash flow metrics suggest a promising outlook.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 |
| 2.13B | 2.29B | 2.33B | 2.37B | 807.00M | Net Debt |
| 2.02B | 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
Negative
8.78
Price Trends
9.13
Negative
9.57
Negative
9.95
Negative
Market Momentum
0.03
Negative
48.41
Neutral
41.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AHCO, the sentiment is Negative. The current price of 8.78 is above the 20-day moving average (MA) of 8.76, below the 50-day MA of 9.13, and below the 200-day MA of 9.95, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 48.41 is Neutral, neither overbought nor oversold. The STOCH value of 41.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 1 New Risks
1.
The use or anticipated use of artificial intelligence ("AI") technologies, including generative AI, by us or third parties, may increase or create new operational risks. Q4, 2024
AdaptHealth Peers Comparison
Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.81B | 28.71 | 19.36% | ― | 34.43% | 31.90% | |
65 Neutral | $1.18B | 15.47 | 5.12% | ― | -0.05% | ― | |
63 Neutral | $2.35B | 30.62 | -19.69% | ― | 7.97% | -592.40% | |
55 Neutral | $1.07B | ― | -186.68% | ― | 9.27% | 1.51% | |
53 Neutral | $5.14B | 3.06 | -43.57% | 2.81% | 16.81% | -0.12% | |
50 Neutral | $399.40M | ― | -161.19% | ― | 1.64% | 16.02% | |
47 Neutral | $536.40M | ― | -19.79% | ― | 8.60% | -42.76% |
* Healthcare Sector Average
Performance Comparison
AHCO
AdaptHealth
8.78
-1.29
-12.81%
UFPT
Ufp Technologies
234.42
-22.22
-8.66%
LIVN
LivaNova
41.88
-17.72
-29.73%
SENS
Senseonics Holdings
0.50
0.06
13.64%
ESTA
Establishment Labs Holdings
36.62
-16.92
-31.60%
BVS
Bioventus
6.53
0.16
2.51%
AdaptHealth Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 0.92%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance, with notable achievements in debt reduction and improvements in the Respiratory and Diabetes Health segments. However, overall revenue and adjusted EBITDA declines, as well as challenges in the Sleep Health segment, balanced the positive aspects. The sentiment is neutral, reflecting both progress and ongoing challenges.Q1-2025 Updates
Positive Updates
Revenue Exceeds Guidance
First quarter revenue exceeded the midpoint of the guidance range by $13.1 million, driven by stronger than anticipated revenues in the Respiratory Health and Diabetes Health segments.
Significant Debt Reduction
AdaptHealth reduced its debt balance by another $25 million in Q1 2025, bringing total debt repayment to $195 million over the last five quarters.
Improvement in Diabetes Health Segment
The Diabetes Health team showed signs of recovery with a second consecutive quarter of sequential improvement in new starts and the lowest resupply attrition rate in two years.
Strong Respiratory Health Segment Performance
First quarter Respiratory Health segment net revenue increased 3.3% compared to the prior year quarter, with a record oxygen census of 325,000 patients.
Negative Updates
Overall Revenue Decline
Net revenue declined by 1.8% compared to the prior year quarter, attributed in part to one less business day.
Adjusted EBITDA Decline
First quarter adjusted EBITDA declined 19.3% from the prior year quarter, with an adjusted EBITDA margin of 16.4% compared to 20.0% in Q1 2024.
Sleep Health Segment Revenue Decline
Sleep Health segment net revenue decreased 2.8% versus the prior year quarter, with new setups slightly behind expectations.
Diabetes Health Segment Revenue Decline
Diabetes Health segment net revenue declined 8.0% compared to the prior year quarter, although showing signs of recovery.
Negative Free Cash Flow
Free cash flow was negative $0.1 million in the first quarter, although an improvement from negative $38.9 million in the prior year quarter.
Company Guidance
During the AdaptHealth First Quarter 2025 earnings call, the company provided a comprehensive overview of their financial performance and guidance. Revenue in the first quarter reached $777.9 million, exceeding the midpoint of their guidance range by $13.1 million, despite a 1.8% decline from the previous year. Adjusted EBITDA was $127.9 million, aligning with the upper half of the guidance range, though it decreased by 19.3% year-over-year, with the adjusted EBITDA margin reported at 16.4%. The company reported a slight free cash flow deficit of $0.1 million, a significant improvement from the negative $38.9 million in the prior year. For the full year 2025, AdaptHealth anticipates revenue between $3.18 billion and $3.32 billion and adjusted EBITDA of $665 million to $705 million, with a free cash flow forecast between $180 million and $220 million. The company is reducing its full-year revenue expectations by $40 million and adjusted EBITDA by $5 million due to the divestiture of certain incontinence assets. AdaptHealth continues to strengthen its financial position, reducing its debt by $25 million during the quarter, and is on track to achieve a net leverage ratio target of 2.5 times.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.