Nucor earnings beat by $0.08, revenue fell short of estimates
Investing.com - UBS maintained its buy rating and $45.00 price target on Acadia Healthcare (NASDAQ:ACHC) Monday amid uncertainty over Tennessee’s directed payment program approval. The healthcare provider, currently trading near its 52-week low of $20.36, appears undervalued according to InvestingPro analysis.
Tennessee’s directed payment program (DPP) remains pending approval of the state’s Medicaid 1115 waiver, according to UBS. The approval could still come before the end of June, though the delay creates uncertainty for Acadia’s second-quarter financial results. This uncertainty is reflected in recent analyst sentiment, with InvestingPro data showing 10 analysts have revised their earnings expectations downward for the upcoming period.
UBS estimates that if approval is not secured soon, Acadia’s second-quarter adjusted EBITDA might need to be revised downward by approximately $20 million from the current estimate of $182 million. This amount represents the expected first and second quarter contributions from the new DPP program.
The investment firm noted that any delayed payments would likely shift to the third and fourth quarters of 2025, potentially leaving full-year projections unchanged despite the quarterly timing differences.
UBS calculates that the new Tennessee DPP program is worth approximately $45 million annually to Acadia Healthcare, based on the total size of the program and the company’s number of inpatient psychiatric beds in the state.
In other recent news, Acadia Healthcare reported its first-quarter results for 2025, with revenue reaching $770.5 million, closely matching the anticipated $769.9 million, and adjusted EBITDA at $134.2 million, slightly surpassing the expected $132.1 million, according to Raymond (NSE:RYMD) James. The company has maintained its full-year 2025 guidance, forecasting revenues between $3.3 billion and $3.4 billion, with adjusted EBITDA projected to range from $675 million to $725 million. RBC Capital Markets reiterated its Outperform rating with a $43 price target, expressing confidence in Acadia’s long-term financial outlook and growth strategy, particularly through the development of new facilities. Cantor Fitzgerald maintained a Neutral rating and a $40 price target, noting the company’s stable performance in inpatient psychiatric services and the potential impact of proposed changes to provider tax regulations. These regulatory changes could affect multiple healthcare operators, including Acadia Healthcare, with a gradual reduction in provider tax caps proposed by the Senate.
Raymond James reaffirmed a strong buy rating with a $40 price target, highlighting Acadia Healthcare’s solid quarterly performance despite some unusual items, such as $31 million in costs related to government investigations. The firm noted that the stock’s valuation is at multi-year lows, suggesting that the market has already factored in significant risks. Cantor Fitzgerald also commented on the company’s growth strategies, including facility expansion and mergers and acquisitions, while acknowledging challenges such as labor cost increases and competitive pressures in the market. Despite these challenges, RBC Capital Markets remains optimistic about Acadia’s potential for growth, emphasizing the management’s revised expectations for earnings growth over the next few years. Investors will be closely monitoring Acadia Healthcare’s performance as it continues to execute its strategic initiatives and navigate regulatory changes.
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