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AdaptHealth
(NASDAQ:AHCO)
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Rating:52Neutral
Price Target:
$5.50
▼(-48.88% Downside)
Action:Reiterated
Date:08/04/26
The score is held back primarily by weakened profitability and margin compression alongside elevated leverage, despite strong revenue growth and resilient operating cash generation. Technicals are moderately supportive with neutral momentum and price above key moving averages, but valuation remains challenged due to losses (negative P/E). The latest earnings call was mixed: a major EBITDA guidance reset and near-term contract/supplier headwinds are partially balanced by strong organic growth, portfolio simplification, and targeted remediation with expected sequential improvement.
Positive Factors
Strong revenue growth
Sustained double-digit organic growth and a multi-billion dollar revenue base indicate durable end-market demand for home medical equipment. Broad-based growth across Sleep, Respiratory and Wellness segments supports scale, referral relationships and installed-base expansion that underpins recurring resupply revenue and longer-term profitability once operational issues are fixed.
Negative Factors
Severe margin compression
A marked drop in gross margins and a substantial net loss materially reduce earnings power and return on equity. Sustained margin pressure undermines the resiliency of cash flows, limits reinvestment capacity, and raises the risk that future growth will not translate into proportional profit without durable cost or pricing fixes.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong revenue growth
Sustained double-digit organic growth and a multi-billion dollar revenue base indicate durable end-market demand for home medical equipment. Broad-based growth across Sleep, Respiratory and Wellness segments supports scale, referral relationships and installed-base expansion that underpins recurring resupply revenue and longer-term profitability once operational issues are fixed.
Read all positive factors
AdaptHealth Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down income from various business segments, indicating which parts of the company are generating the most revenue and where growth opportunities or challenges may exist.
Breaks down income from various business segments, indicating which parts of the company are generating the most revenue and where growth opportunities or challenges may exist.
Data provided by:
The Fly
The FlyAdaptHealth (AHCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$792.16M
Dividend YieldN/A
Average Volume (3M)1.41M
Price to Earnings (P/E)―
Beta (1Y)-0.04
Revenue Growth-0.43%
EPS Growth-408.09%
CountryUS
Employees10,900
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)-1.68
Shares Outstanding136,344,200
10 Day Avg. Volume1,077,853
30 Day Avg. Volume1,411,350
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)0.89
Price to Sales (P/S)0.41
P/FCF Ratio6.14
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$10.00Price Target Upside-7.06% Downside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)-0.02
Revenue Forecast (FY)$2.88B
AdaptHealth Business Overview & Revenue Model
Company Description
AdaptHealth Corp., alongside its network of subsidiaries, delivers a comprehensive range of home medical equipment (HME), supplies, and associated services across the United States. The company specializes in sleep therapy, providing CPAP and bi-P...
How the Company Makes Money
AdaptHealth generates revenue primarily by providing home medical equipment and ongoing consumable supplies to patients under insurance reimbursement. A key revenue stream is sleep therapy, where the company earns from both (1) the initial dispens...
AdaptHealth Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Neutral
The call presents a mixed picture: underlying top-line growth and strong segment performance (double-digit organic growth, expanding capitated revenue, digital adoption, strategic portfolio simplification and actions to reduce debt) are meaningful positives. However, material near-term headwinds — notably operational inefficiencies and elevated costs on a large West Coast capitated contract, an unexpected supplier price increase ($30M H2 impact), a significant reduction in full-year adjusted EBITDA guidance, a Q2 negative free cash flow driven by elevated CapEx, and a $144.2M goodwill impairment — temper the outlook. Management outlined concrete remediation steps (workflow fixes, technology/digital adoption, restructuring savings, debt paydown plans and expected elimination of stranded overhead) and expects sequential improvement toward run-rate profitability, but the magnitude of the near-term earnings and cash-flow impacts means the positives and negatives are largely in balance for the near term.Positive Updates
Strong Top-Line Growth
Second quarter continuing-operations net revenue of $740.3M, up ~12.7% year-over-year and +15.9% organic growth. At the midpoint, full-year 2026 continuing-operations revenue guidance of $2.85B–$2.89B (excludes ~$630M of Diabetes Health revenue moving to discontinued operations).
Negative Updates
West Coast Capitated Contract Operational and Profitability Challenges
Significant ramp issues on the large West Coast capitated contract: unexpected higher order volumes (sleep resupply and enteral), inherited inefficient workflows (excess urgent orders) and elevated logistics and labor costs. Company estimates a ~$40M expected second-half profitability impact relative to prior projections; Jason noted a $15M Q2 miss and $40M revised second-half impact (total guide-down related to the contract of $55M).
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Top-Line Growth
Second quarter continuing-operations net revenue of $740.3M, up ~12.7% year-over-year and +15.9% organic growth. At the midpoint, full-year 2026 continuing-operations revenue guidance of $2.85B–$2.89B (excludes ~$630M of Diabetes Health revenue moving to discontinued operations).
Read all positive updates
Company Guidance
AdaptHealth reset 2026 guidance on a continuing‑operations basis: full‑year net revenue $2.85–2.89 billion (excludes ~ $630 million of Diabetes Health revenue moving to discontinued operations) and adjusted EBITDA $490–520 million (down from prior $680–730 million) after a $100 million divestiture impact (≈$40M of EBITDA moving to discontinued ops and ~$60M of stranded corporate overhead, ~half of which is expected to be removed within 12 months), a $55 million revision related to the West Coast capitated contract (including a $15M Q2 miss and $40M H2 impact), a $30 million second‑half supplier price increase, and a $15 million second‑half hit from portfolio wind‑downs; full‑year free cash flow is expected to be $80–120 million (includes Diabetes cash flows). Near‑term guidance is Q3 net revenue $720–740 million, adjusted EBITDA margin ~17.9%, and Q3 free cash flow ≈ $50 million. For context, Q2 continuing‑ops net revenue was $740.3 million (organic growth 15.9%), adjusted EBITDA $132.0 million (17.8% margin), free cash flow was negative $20.9 million, CapEx was $166.2 million (including ~ $25 million of one‑time equipment/vehicle purchases), consolidated leverage was 3.06x (company targeting 2.5x and drew a $325 million delayed‑draw term loan to redeem 6.125% 2028 notes); management expects sequential improvement and run‑rate profitability on the West Coast capitated contract next year.AdaptHealth Financial Statement Overview
Summary
Income Statement
42
Neutral
Balance Sheet
48
Neutral
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.01B | 3.24B | 3.26B | 3.20B | 2.97B | 2.45B |
| Gross Profit | 312.09M | 568.56M | 681.09M | 681.77M | 417.43M | 445.61M |
| EBITDA | 290.01M | 503.64M | 628.02M | -171.09M | 630.76M | 544.21M |
| Net Income | -228.23M | -70.79M | 90.42M | -678.89M | 69.32M | 156.18M |
Balance Sheet | ||||||
| Total Assets | 4.34B | 4.32B | 4.49B | 4.51B | 5.22B | 5.25B |
| Cash, Cash Equivalents and Short-Term Investments | 43.29M | 106.14M | 109.75M | 77.13M | 46.27M | 149.63M |
| Total Debt | 2.07B | 1.90B | 2.13B | 2.29B | 2.33B | 2.37B |
| Total Liabilities | 2.95B | 2.79B | 2.91B | 3.04B | 3.06B | 3.18B |
| Stockholders Equity | 1.38B | 1.52B | 1.57B | 1.46B | 2.15B | 2.06B |
Cash Flow | ||||||
| Free Cash Flow | 97.68M | 219.38M | 235.78M | 143.20M | -17.56M | 72.37M |
| Operating Cash Flow | 583.27M | 601.77M | 541.84M | 480.67M | 373.87M | 275.68M |
| Investing Cash Flow | -624.38M | -303.19M | -310.27M | -357.28M | -411.17M | -1.82B |
| Financing Cash Flow | 15.76M | -302.19M | -198.95M | -92.53M | -66.05M | 1.60B |
AdaptHealth Risk Analysis
AdaptHealth disclosed 48 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.49B | 34.38 | 16.72% | ― | 7.32% | 7.24% | |
68 Neutral | $2.62B | -72.21 | -17.88% | ― | 23.57% | -543.50% | |
67 Neutral | $1.51B | 27.21 | 5.51% | 2.02% | 3.86% | -48.06% | |
54 Neutral | $1.58B | -24.46 | -45.97% | ― | 3.92% | 70.03% | |
52 Neutral | $792.16M | -3.46 | -15.16% | ― | -0.43% | -408.09% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $1.43B | -198.92 | -0.69% | ― | 1.60% | 98.56% |
* Healthcare Sector Average
AHCO
AdaptHealth
5.81
-3.57
-38.06%
CNMD
Conmed
50.41
-2.78
-5.22%
IART
Integra Lifesciences
18.34
4.29
30.53%
UFPT
Ufp Technologies
321.76
102.81
46.96%
TNDM
Tandem Diabetes Care
22.72
11.88
109.59%
AXGN
AxoGen
48.73
33.24
214.59%
AdaptHealth Corporate Events
Business Operations and StrategyM&A Transactions
AdaptHealth divests diabetes unit to refocus core business
Positive
Jul 20, 2026
On July 19, 2026, AdaptHealth Corp. entered into a definitive agreement to sell substantially all assets of its Diabetes Health business to Cardinal Health’s subsidiary RGH Enterprises for $235 million in cash, subject to customary post-clos...
Business Operations and StrategyPrivate Placements and Financing
AdaptHealth Announces Redemption of Senior Notes Due 2028
Positive
Jul 7, 2026
On July 6, 2026, AdaptHealth LLC, an indirect wholly owned subsidiary of AdaptHealth Corp., announced it will redeem all of its outstanding 6.125% Senior Notes due 2028, totaling $325 million in principal. The notes are to be redeemed at par plus ...
Executive/Board ChangesShareholder Meetings
AdaptHealth Shareholders Approve Directors, Auditor and Compensation
Positive
Jun 22, 2026
On June 18, 2026, AdaptHealth held its annual shareholders’ meeting via live audio webcast, with 120.7 million shares represented, or 88.67% of eligible voting power, constituting a quorum. Stockholders were entitled to one vote per share as...
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.