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Acadia Healthcare (ACHC) Down 1% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Acadia Healthcare (ACHC - Free Report) . Shares have lost about 1% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Acadia Healthcare due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Acadia Healthcare Q1 Earnings Beat, Revenues Meet

Acadia Healthcare reported first-quarter 2019 adjusted earnings of 39 cents per share, beating the Zacks Consensus Estimate by 11.4% but declining 25% year over year.

Earnings reflected a rise in revenues which was more than offset by a higher increase in expenses.

Quarterly Details

Revenues of Acadia Healthcare rose 2.5% year over year to $760.6 million and came almost in line with the Zacks Consensus Estimate.

Total same facility revenues grew 5.6% with a 2.8% increase in patient days and a 2.7% rise in revenues per patient day.

U.S. same facility revenues were up 6.1% year over year to $475 million. The segment also recorded a 4.3% year-over-year increase in patient days and 1.7% increase in revenues per patient day.

U.K. same facility revenues rose 4.7% year over year to $249 million. The number of patient days inched up 0.9% from the year-earlier period whereas revenues per patient per day were up 3.7%.

Consolidated EBITDA was $136, down 6.7% year over year.

Total adjusted expenses increased 4.3% year over year to $724 million due to higher salaries, professional fees, supplies, wages and benefits, interest expenses, depreciation and amortization as well as rents and leases.

In the reported quarter, the company added 260 beds in total.

Financial Update

Cash and cash equivalents as of Mar 31, 2019 were $43.7 million, down 13.5% from the 2018-end level.

Long-term debt was $3.22 billion as of Mar 31, 2019, up 2% from year-end 2018 levels.

Net cash provided by operating activities in the first quarter was $43.7 million, down 40% year over year.

2019 Guidance

For 2019, the company expects adjusted earnings per share between $2.15 and $2.30 on revenues of approximately $3.15-$3.2 billion. Adjusted EBITDA is anticipated between $610 million and $630 million.

The company expects to add approximately 700 beds to existing and new facilities.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Acadia Healthcare has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Acadia Healthcare has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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