Acadia Healthcare Company, Inc. (NASDAQ: ACHC)

Sector: Healthcare Industry: Medical Care Facilities CIK: 0001520697
Market Cap 1.31 Bn
P/B 0.42
P/E 12.22
P/S 0.40
ROIC (Qtr) 4.60
Div Yield % 0.00
Rev 1y % (Qtr) 4.41
Total Debt (Qtr) 2.43 Bn
Debt/Equity (Qtr) 0.78

About

Acadia Healthcare Company, Inc. (ACHC) is a prominent player in the healthcare industry, specifically specializing in behavioral healthcare services in the United States. With its headquarters in Franklin, Tennessee, Acadia Healthcare is dedicated to providing a range of behavioral healthcare services, including acute inpatient psychiatric facilities, specialty treatment facilities, comprehensive treatment centers, and residential treatment centers. Acadia Healthcare's primary business activities revolve around offering various behavioral healthcare...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 118.69M provide 2.59x coverage of short-term debt 45.85M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 334.89M provides exceptional 29.16x coverage of minority interest expenses 11.48M, showing strong core operations.
  • Strong free cash flow of (323.86M) provides 39.66x coverage of acquisition spending (8.16M), indicating disciplined M&A strategy.
  • Cash position of 118.69M provides exceptional 10.34x coverage of minority interest expenses 11.48M, indicating strong liquidity.
  • Operating cash flow of 334.89M fully covers other non-current liabilities 224.65M by 1.49x, showing strong long-term stability.

Bear case

  • Operating cash flow of 334.89M barely covers its investment activities of (667.11M), with a coverage ratio of -0.50, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 118.69M provide limited coverage of acquisition spending of (8.16M), which is -14.54x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (323.86M) provides weak coverage of capital expenditures of 658.75M, with a -0.49 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 260.99M show weak coverage of depreciation charges of 183.04M, with a 1.43 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of (323.86M) represents just -0.77x of debt issuance 422.04M, suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Medical Care Facilities
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 HCA HCA Healthcare, Inc. 114.88 Bn 18.11 1.54 46.35 Bn
2 THC Tenet Healthcare Corp 18.07 Bn 13.34 0.87 13.19 Bn
3 UHS Universal Health Services Inc 14.64 Bn 10.65 0.86 5.11 Bn
4 FMS Fresenius Medical Care AG 14.10 Bn 16.69 0.61 14.98 Bn
5 EHC Encompass Health Corp 12.55 Bn 19.95 2.17 2.66 Bn
6 ENSG Ensign Group, Inc 10.08 Bn 30.72 2.09 2.16 Bn
7 DVA Davita Inc. 8.90 Bn 11.53 0.67 12.78 Bn
8 CHE Chemed Corp 6.38 Bn 22.87 2.52 0.14 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.55 1.26
EV to Cash from Ops. EV/CFO 10.59 12.78
EV to Debt EV to Debt 1.46 12.10
EV to EBIT EV/EBIT 13.59 10.74
EV to EBITDA EV/EBITDA 7.92 16.04
EV to Free Cash Flow [EV/FCF] EV/FCF -10.95 18.02
EV to Market Cap EV to Market Cap 2.74 432.64
EV to Revenue EV/Rev 1.09 2.77
Price to Book Value [P/B] P/B 0.41 -1.92
Price to Earnings [P/E] P/E 12.05 5.13
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.10
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -13.44
Dividend per Basic Share Div per Share (Qtr) 0.00 0.27
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 5.42
Interest Coverage Int. cover (Qtr) 1.99 -97.94
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -12.30 -114.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 44.49 65.22
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.97
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -40.27 -46.98
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -28.46 75.97
EBIT Growth (1y) % EBIT 1y % (Qtr) -45.70 -61.19
EBT Growth (1y) % EBT 1y % (Qtr) -65.23 -115.48
EPS Growth (1y) % EPS 1y % (Qtr) -61.89 -24.32
FCF Growth (1y) % FCF 1y % (Qtr) 29.18 309.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 1.05 17.88
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.51 1.04
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.04
Cash Ratio Cash Ratio (Qtr) 0.23 0.39
Current Ratio Curr Ratio (Qtr) 1.44 1.39
Debt to Equity Ratio Debt/Equity (Qtr) 0.78 -13.19
Interest Cover Ratio Int Coverage (Qtr) 1.99 -97.94
Times Interest Earned Times Interest Earned (Qtr) 1.99 -97.94
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.60 -95.81
EBIT Margin % EBIT Margin % (Qtr) 7.99 -94.97
EBT Margin % EBT Margin % (Qtr) 3.98 -105.60
Gross Margin % Gross Margin % (Qtr) 34.40 23.31
Net Profit Margin % Net Margin % (Qtr) 3.30 -106.14