On Friday, Truist Securities revised its stock price target for AdaptHealth (NASDAQ: NASDAQ:AHCO), a provider of home medical equipment, from $13.00 to $12.00, while maintaining a Buy rating on the company's stock. The adjustment follows AdaptHealth's third-quarter results and an update to its full-year 2024 guidance.
The firm's analyst has updated estimates to align with the company's recent performance and future expectations. As a result, the projections for adjusted EBITDA from 2024 to 2026 have been reduced. The new estimates stand at $664 million for 2024, $688 million for 2025, and $728 million for 2026. These figures have been revised down from the previous estimates of $681 million, $730 million, and $768 million, respectively.
The updated guidance and the subsequent changes by Truist Securities reflect the latest financial data released by AdaptHealth. The company's stock price will continue to be monitored by investors as it adjusts to the new target and maintains its market position.
In other recent news, AdaptHealth Corp. reported a slight increase in its Q3 2024 net revenue, reaching $805.9 million despite operational challenges in its diabetes segment. The company's sleep and respiratory revenues showed growth, while diabetes revenue experienced a decline due to reimbursement pressures. Adjusted EBITDA was reported at $164.3 million, with a margin of 20.4%, and free cash flow surpassed targets.
AdaptHealth has secured a $950 million senior secured credit facility, and raised its full-year guidance, with revenue expectations between $3.22 billion and $3.26 billion and adjusted EBITDA between $655 million and $675 million.
However, the company adjusted its revenue midpoint for 2024 by reducing it by $45 million and EBITDA midpoint by $15 million, reflecting the ongoing challenges in the diabetes segment.
Despite these challenges, AdaptHealth remains committed to operational improvements and debt reduction. The company is also optimistic about growth opportunities across service lines and is investing in enterprise sales and partnerships to drive organic growth. These are the recent developments in AdaptHealth's operations and financial status.
InvestingPro Insights
To complement Truist Securities' analysis of AdaptHealth (NASDAQ: AHCO), recent data from InvestingPro offers additional context for investors. Despite the lowered price target, AdaptHealth's stock still shows potential upside. The InvestingPro Fair Value for AHCO stands at $15.43, suggesting room for growth from its previous closing price of $10.04.
InvestingPro Tips highlight that management has been aggressively buying back shares, indicating confidence in the company's future. This aligns with the Buy rating maintained by Truist Securities. Additionally, net income is expected to grow this year, which could support the company's valuation going forward.
It's worth noting that while AdaptHealth wasn't profitable over the last twelve months, with a P/E ratio of -6.21, analysts predict the company will be profitable this year. This expectation is reflected in the adjusted P/E ratio of 10.34 for the last twelve months as of Q3 2024, suggesting a more optimistic outlook.
For investors seeking a deeper understanding of AdaptHealth's financial health and prospects, InvestingPro offers 7 additional tips, providing a comprehensive view of the company's position in the market.
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