UBS initiates Addus HomeCare stock with Buy rating on aging population trends

Investing.com - UBS initiated coverage on Addus HomeCare (NASDAQ:ADUS) with a Buy rating and a $145.00 price target, citing favorable demographic trends and valuation opportunity. The target represents a 22% upside potential, aligning with broader analyst sentiment as InvestingPro data shows six analysts have recently revised their earnings estimates upward for the $2.09 billion market cap company.

The investment firm believes Addus will benefit from increasing demand driven by an aging population with higher co-morbidities and continued shifts toward lower-cost care settings. This outlook is supported by the company’s strong execution, with revenue growing 14.29% over the last twelve months.

UBS notes that Addus’s current valuation of approximately 12 times earnings represents a discount to its 14.5 times five-year average, offering investors a buying opportunity as the stock has been discounted due to concerns about Medicaid cuts. InvestingPro analysis indicates the stock is currently near its Fair Value, with a "GREAT" overall financial health score of 3.28 out of 5. Subscribers can access 7 additional ProTips and comprehensive valuation metrics on the platform.

The firm expects valuation expansion as Addus demonstrates consistent revenue growth of at least 10% and as market concerns about Medicaid reform subside.

UBS projects Addus will achieve its target annual revenue growth through a combination of 5% organic growth, split evenly between volume increases and reimbursement rate improvements, with the payment rate environment expected to remain stable.

In other recent news, Addus HomeCare Corporation reported its second-quarter earnings for 2025, surpassing market expectations. The company achieved an adjusted earnings per share of $1.49, exceeding the forecasted $1.47. Revenue also outperformed expectations, reaching $349.4 million compared to the anticipated $346.55 million. Additionally, Addus HomeCare announced a significant leadership change, naming Heather Dixon as the new President and Chief Operating Officer. Dixon, who will assume her role in mid-September, previously served as Chief Financial Officer at Acadia Healthcare and has held executive positions at Everside Health. This leadership transition follows W. Bradley Bickham’s move to an advisor role until his retirement in March 2026. These developments highlight Addus HomeCare’s strategic focus and robust financial performance.

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