Shares of Acadia Healthcare Company, Inc. ACHC lost 18.7% since it reported third-quarter 2024 earnings on Oct. 30, despite an earnings beat in the third quarter. Investors might be worried about the reduced revenue and EBITDA outlook for 2024 due to the sale of two subscale satellite programs. However, the third-quarter earnings benefited from improved volumes and higher patient days.
ACHC reported adjusted third-quarter earnings of 91 cents per share, which beat the Zacks Consensus Estimate by 1.1%. The bottom line was flat year over year.
Total revenues increased 8.7% year over year to $815.6 million. The top line missed the consensus mark by a whisker.
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Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise
Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise
Acadia Healthcare Company, Inc. price-consensus-eps-surprise-chart | Acadia Healthcare Company, Inc. Quote
Q3 Operations
Same-facility revenues of $802.6 million rose 8.6% year over year but fell short of our estimate of $808.6 million. The year-over-year improvement was driven by 3.6% growth in revenue per patient day and a 4.7% increase in patient days.
Admissions grew 2% year over year. The average length of stay grew 2.7% year over year but missed our growth estimate of 3%.
In the overall facility, patient days improved 4.6% year over year while admissions grew 2.4% year over year. Revenue per patient day improved 3.9% year over year, which was higher than our growth estimate of 2.6%. The average length of stay rose 2.1% year over year but lagged our growth estimate of 3.5%.
Adjusted EBITDA climbed 10.5% year over year to $194.3 million but came lower than our estimate of $195.4 million. Adjusted EBITDA margin deteriorated 50 bps year over year to 28.2%.
Total expenses of $717.1 million declined 30.9% year over year but higher than our estimate of $699.1 million. The year-over-year decrease was due to a legal settlements expense cost recognized in the prior-year quarter and lower transaction, legal and other costs.
Financial Update (as of Sept. 30, 2024)
Acadia Healthcare exited the third quarter with cash and cash equivalents of $82.1 million, which decreased 17.9% from the 2023-end level. It had a leftover capacity of $321.5 million under its $600 million revolving credit facility at the third-quarter end.
Total assets of $5.9 billion increased 9.5% from the figure at 2023-end.
Long-term debt amounted to $1.8 billion, which escalated 34.4% from the figure as of Dec. 31, 2023. The current portion of long-term debt was $71.7 million.
Total equity of $3 billion increased 9% from the 2023-end level. The net leverage ratio was around 2.5X at the third-quarter end.
Net cash provided by operations totaled $13 million in the first nine months of 2024 against $346 million in the prior-year comparable period.
Business Update
Acadia Healthcare added 15 beds to its existing facilities in the third quarter. It also inaugurated one acute care hospital in Madison, WI.
2024 Guidance Updated
Revenues are projected to be between $3.15 billion and $3.165 billion compared with the earlier guided range of $3.18-$3.225 billion. The mid-point of the updated outlook indicates an improvement of 7.8% from the 2023 figure.
Adjusted EBITDA is estimated to be in the range of $725-$735 million compared with the previous guidance of $725-$765 million. The mid-point of the revised outlook indicates 7.7% growth from the 2023 figure.
Adjusted earnings per share (EPS) are predicted to be between $3.35 and $3.45 compared with the earlier guided range of $3.45 and $3.65.
Interest expenses continue to be estimated within the band of $110-$120 million. Depreciation and amortization expenses are anticipated to be in the $145-$155 million band. The tax rate is still expected to be in the range of 24.5-25.5%. Stock compensation expenses are still expected to be between $40 million and $45 million.
Operating cash flows are forecasted to be in the range of $525-$550 million. Expansion capital expenditure is anticipated to be between $550 million and $595 million. Maintenance and IT capital expenditures are expected to be in the range of $95-$105 million.
Management still estimates to add more than 400 beds to existing facilities in 2024. It aims to inaugurate a maximum of 14 comprehensive treatment centers. ACHC anticipates opening three inpatient facilities in the fourth quarter of 2024, which comprise two new joint venture facilities.
Zacks Rank
Acadia Healthcare currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported third-quarter 2024 results so far, the bottom-line results of Centene Corporation CNC , The Cigna Group CI and HCA Healthcare, Inc. HCA beat the respective Zacks Consensus Estimate.
Centene reported third-quarter 2024 adjusted EPS of $1.62, which outpaced the Zacks Consensus Estimate by 16.6%. However, the bottom line fell 19% year over year. Revenues were $42 billion, which advanced 10.5% year over year. The top line surpassed the consensus mark by 10.9%. Revenues from Medicaid dipped 1% year over year to $21.3 billion, while Medicare revenues grew 4% year over year to $5.6 billion. Additionally, commercial revenues of $8.7 billion climbed 35% year over year.
Premiums of Centene amounted to $36.1 billion, which advanced 6.6% year over year. Service revenues dropped 28.8% year over year to $784 million. Investment and other income of $432 million more than doubled year over year. As of Sept. 30, 2024, total membership was 28.6 million, which grew 2.4% year over year. Adjusted net earnings of $849 million tumbled 21.5% year over year.
Cigna’s third-quarter adjusted EPS of $7.51 beat the Zacks Consensus Estimate by 4%. The bottom line improved 10.9% year over year. Adjusted revenues were $63.7 billion, which climbed 29.8% year over year. The top line outpaced the consensus mark by 6.5%. CI’s medical customer base was 19 million as of Sept. 30, 2024, which slipped 2.9% year over year. Adjusted income from operations grew 5% year over year to $2.1 billion.
The Evernorth unit recorded adjusted revenues of $52.6 billion, which surged 36% year over year. Adjusted operating income, on a pre-tax basis, advanced 9% year over year to $1.88 billion. However, the adjusted pre-tax margin of 3.6% deteriorated 80 bps year over year. The Cigna Healthcare unit’s adjusted revenues were $13.2 billion, which grew 3% year over year. The unit’s pre-tax adjusted operating income decreased 4% year over year to $1.17 billion. Medical care ratio deteriorated 230 bps year over year to 82.8% at the third-quarter end.
HCA Healthcare reported third-quarter adjusted EPS of $5.05, which beat the Zacks Consensus Estimate by 1.6%. The bottom line improved 29.2% year over year. Revenues amounted to $17.5 billion, which improved 7.9% year over year . However, the top line missed the consensus mark by a whisker. Same-facility equivalent admissions increased 4.5% year over year, while same-facility admissions grew 4.5% year over year.
Same-facility equivalent admissions beat the consensus mark by 1.3%. Same-facility revenue per equivalent admission rose 2.5% year over year. Same-facility inpatient surgeries grew 1.6% year over year. Same-facility outpatient surgeries declined 2% year over year. Additionally, same-facility emergency room visits rose 4.6% year over year. Adjusted EBITDA improved 13.4% year over year to $3.3 billion.
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