Shares of Acadia Healthcare Company, Inc. ACHC declined 9.4% since it reported first-quarter 2024 earnings on May 1. The results were hurt by a decline in admissions, which remain the most significant contributor to a healthcare facility operator’s top line. Additionally, an elevated expense level resulting from higher salaries, wages and benefits led to the downside as well. Nevertheless, improved patient days provided some respite to its revenues while sustained demand for behavioral health services and impressive growth-related initiatives remained other tailwinds for the company.
ACHC reported adjusted first-quarter earnings of 84 cents per share, which surpassed the Zacks Consensus Estimate by 5%. The bottom line rose 12% year over year.
Total revenues of $768.1 million improved 9.1% year over year. Yet, the top line fell short of the consensus mark by 1.2%.
Acadia Healthcare Company, Inc. Price, Consensus and EPS Surprise
Acadia Healthcare Company, Inc. price-consensus-eps-surprise-chart | Acadia Healthcare Company, Inc. Quote
Q1 Operations
Same-facility revenues amounted to $756.3 million, which advanced 9.2% year over year but missed the Zacks Consensus Estimate and our estimate of $766 million. The year-over-year growth resulted from a 6.9% improvement in revenue per patient day and a 2.2% rise in patient days. However, admissions slid 1.7% year over year. The average length of stay rose 4% year over year, higher than our growth estimate of 2.6%.
In the overall facility, patient days grew 1.8% while admissions decreased 1.7% year over year. Revenue per patient day advanced 7.1% year over year, which beat our growth estimate of 4.6%. The average length of stay grew 3.6% year over year, higher than our growth estimate of 2.3%.
Adjusted EBITDA of $173.9 million rose 14.9% year over year and outpaced our estimate of $171 million. Adjusted EBITDA margin improved 110 basis points year over year to 22.6%.
Total expenses of $669.2 million increased 8.2% year over year due to higher salaries, wages and benefits, professional fees, other operating costs, and interest expenses. However, the metric fell short of our estimate of $674.1 million.
Financial Update (As of Mar 31, 2024)
Acadia Healthcare exited the first quarter with cash and cash equivalents of $77.3 million, which dropped 22.8% from the 2023-end level. It had a leftover capacity of $371.5 million under its $600 million revolving credit facility at the quarter end.
Total assets of $5.5 billion increased 3% from the figure at 2023 end.
Long-term debt amounted to $1.8 billion, which climbed 33.6% from the figure as of Dec 31, 2023. The current portion of long-term debt was $61.5 million.
Total equity of $2.9 billion rose 3% from the 2023-end level. The net leverage ratio was around 2.6X at the quarter end.
Net cash used in operations totaled $321.3 million against net cash generated from operating activities of $44.4 million in the prior-year quarter.
Business Update
Acadia Healthcare added 27 beds to its existing facilities in the first quarter. It also inaugurated one specialty de novo facility, named Sabal Palms Recovery Center, in Florida. The company added 15 outpatient programs. Additionally, it completed the Turning Point Centers buyout in February 2024. It also purchased three comprehensive treatment centers in North Carolina in March 2024.
ACHC also initiated construction work on two joint venture hospitals, one in partnership with Orlando Health in Florida and the other one in alliance with Tufts Medicine across Massachusetts.
2024 Guidance Reiterated
Revenues are anticipated to lie between $3.18 billion and $3.25 billion. Adjusted EBITDA is estimated to be in the range of $730-$770 million.
Adjusted earnings per share (EPS) are forecast between $3.40 and $3.70 in 2024, the mid-point of which implies a rise of 3.2% from the 2023 figure.
Interest expenses are estimated within $110-$120 million. Depreciation and amortization expenses are anticipated in the $150-$160 million band. The tax rate is expected within 24.5-25.5%. Stock compensation expenses are projected to lie between $40 million and $45 million.
Operating cash flows are forecasted within $525-$575 million for 2024. Expansion capital expenditure is anticipated between $425 million and $475 million. Maintenance and IT capital expenditures are expected to be in the range of $90-$110 million.
Management estimates to add more than 400 beds to existing facilities in 2024. It targets to inaugurate a maximum of 14 CTCs this year.
Zacks Rank
Acadia Healthcare currently has a Zacks Rank #4 (Sell).
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 first-quarter 2024 results so far, the bottom-line results of The Cigna Group CI, Centene Corporation CNC and Molina Healthcare, Inc. MOH beat the respective Zacks Consensus Estimate.
Cigna reported first-quarter 2024 adjusted EPS of $6.47, which outpaced the Zacks Consensus Estimate by 4.9%. The bottom line advanced 19.6% year over year. Adjusted revenues advanced 23% year over year to $57.2 billion. The top line beat the consensus mark by 1.1%. The medical customer base was 19.2 million as of Mar 31, 2024, which slid 1.5% year over year. Adjusted selling, general and administrative (SG&A) expense ratio of 6.4% improved 120 basis points (bps) year over year.
CI reported adjusted income from operations of $1.9 billion, which rose 16% year over year. Adjusted revenues in the Evernorth Health Services segment climbed 28% year over year to $46.2 billion. Adjusted operating income on a pretax basis amounted to $1.36 billion. The Cigna Healthcare segment recorded adjusted revenues of $13.28 billion, which advanced 4% year over year. The unit’s pre-tax adjusted operating income rose 20% year over year to $1.3 billion. Medical care ratio improved 140 bps year over year to 79.9% at the first-quarter end.
Centene recorded first-quarter 2024 adjusted EPS of $2.26, which outpaced the Zacks Consensus Estimate by 8.1%. The bottom line improved 7.1% year over year. Revenues advanced 3.9% year over year to $40.4 billion. The top line beat the consensus mark by 11%. Revenues from Medicaid amounted to $21.5 billion, which slipped 3% year over year while Medicare revenues inched up 1% year over year to $5.9 billion.
Additionally, commercial revenues of $7.8 billion climbed 48% year over year. Premiums of CNC rose 5% year over year to $35.5 billion. Service revenues of $808 million declined 28.3% year over year. As of Mar 31, 2024, total membership was 28.4 million, which dipped marginally year over year. Adjusted net earnings grew 4.1% year over year to $1.22 billion.
Molina Healthcare reported first-quarter 2024 adjusted EPS of $5.73, which beat the Zacks Consensus Estimate by 5%. However, the bottom line dipped 1.4% year over year. Total revenues amounted to $9.9 billion, which improved 21.9% year over year. Also, the top line outpaced the consensus mark by 4.3%. Premium revenues of $9.5 billion climbed 21% year over year.
Investment income soared 52.1% year over year to $108 million. Adjusted general and administrative expense ratio deteriorated 10 bps year over year to 7.1%. MOH’s adjusted net income dipped 0.9% year over year to $334 million. The consolidated MCR (medical costs as a percentage of premium revenues) was 88.5%. The metric deteriorated 140 bps year over year. As of Mar 31, 2024, total membership advanced 9% year over year to around 5.7 million.
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Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
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Centene Corporation (CNC) : Free Stock Analysis Report
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