Top 5 Things You Need to Know About Acadia Healthcare

It's been a great morning session for Acadia Healthcare investors, who saw their shares rise 1.3% to a price of $65.91 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.

Acadia Healthcare's Valuation Is in Line With Its Sector Averages:

Acadia Healthcare Company, Inc. provides behavioral healthcare services in the United States and Puerto Rico. The company belongs to the Health Care sector, which has an average price to earnings (P/E) ratio of 30.21 and an average price to book (P/B) ratio of 4.08. In contrast, Acadia Healthcare has a trailing 12 month P/E ratio of -507.0 and a P/B ratio of 2.11.

Acadia Healthcare's PEG ratio is 1.82, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged:

2018 2019 2020 2021 2022 2023
Revenue (M) $1,905 $2,008 $2,090 $2,314 $2,610 $2,929
Operating Margins 31% 4% 9% 12% 14% -1%
Net Margins -9% 5% -32% 8% 10% -1%
Net Income (M) -$176 $109 -$672 $191 $273 -$22
Net Interest Expense (M) -$185 -$187 -$158 -$77 -$70 -$82
Depreciation & Amort. (M) $80 $88 $95 $107 $118 $132
Diluted Shares (M) 87 88 89 91 92 91
Earnings Per Share -$2.01 $1.24 -$7.59 $2.1 $2.98 -$0.24
EPS Growth n/a 161.69% -712.1% 127.67% 41.9% -108.05%
Avg. Price $37.88 $30.63 $30.66 $59.95 $64.27 $65.07
P/E Ratio -18.85 24.7 -4.01 27.88 21.07 -271.12
Free Cash Flow (M) $161 $100 $434 $130 $84 $38
CAPEX (M) $253 $233 $225 $245 $296 $424
EV / EBITDA 9.66 34.89 20.11 17.57 14.41 67.7
Total Debt (M) $3,228 $3,193 $3,276 $1,516 $1,407 $1,401
Net Debt / EBITDA 4.71 18.6 10.38 3.61 2.66 12.16
Current Ratio 1.08 1.17 1.93 1.22 1.3 0.67

Acadia Healthcare has positive cash flows, not enough current assets to cover current liabilities because its current ratio is 0.67, and a highly leveraged balance sheet. On the other hand, the company benefits from growing revenues and increasing reinvestment in the business and a strong EPS growth trend.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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