AdaptHealth (NASDAQ:AHCO) Announces Quarterly Earnings Results, Misses Estimates By $1.08 EPS

Key Points

• AdaptHealth missed EPS estimates sharply: The company reported a quarterly loss of $1.13 per share versus the consensus loss estimate of $0.05. Revenue reached $745.65 million, exceeding estimates of $725.87 million, but declined 9.1% year over year.
• Management raised full-year revenue and adjusted EBITDA guidance to $2.88–$2.90 billion and $510–$525 million, respectively, citing strong Sleep Health and resupply performance and improved capitated-contract margins.
• Financial pressures remain: Free cash flow guidance was reduced to $55–$80 million, net leverage stayed above the company’s target, and analysts lowered price targets despite a consensus “Moderate Buy” rating.

AdaptHealth (NASDAQ:AHCO - Get Free Report) released its quarterly earnings results on Tuesday. The company reported ($1.13) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.05) by ($1.08), FiscalAI reports. The firm had revenue of $745.65 million for the quarter, compared to analyst estimates of $725.87 million. AdaptHealth had a positive return on equity of 3.36% and a negative net margin of 7.07%. The company's quarterly revenue was down 9.1% compared to the same quarter last year. During the same period last year, the firm earned $0.16 EPS.

Here are the key takeaways from AdaptHealth's conference call:

• Third-quarter results exceeded guidance: Revenue rose 10.9% year over year to $745.6 million, organic growth was 12.8%, and adjusted EBITDA was $141.9 million, helped by strong Sleep Health and resupply performance.
• The largest capitated contract improved materially, moving from a negative 4% margin in the second quarter to approximately 10% in the third quarter and a roughly 14% exit run rate. Management expects the contract to reach a 20% margin by the fourth quarter of 2027, excluding any potential pricing adjustment.
• AdaptHealth raised full-year revenue guidance to $2.88 billion-$2.90 billion and adjusted EBITDA guidance to $510 million-$525 million. The company also secured four preferred-provider agreements with large health systems and added two capitated contracts covering approximately 72,000 lives.
• Full-year free cash flow guidance was lowered to $55 million-$80 million, although management attributed the change primarily to pulling forward vendor payments to capture discounts. Net leverage remained approximately 3.05 times, above the company’s 2.5-times target.
• The Diabetes Health sale to Cardinal Health is expected to close in early 2027, with proceeds expected to be directed significantly toward debt reduction. The company is also managing Medline’s bed field action; it expects reimbursement from Medline, but repair and replacement work will continue over multiple quarters and could create short-term costs.

AdaptHealth Price Performance

AdaptHealth stock traded up $0.11 during mid-day trading on Tuesday, hitting $6.02. The company's stock had a trading volume of 1,882,081 shares, compared to its average volume of 1,895,179. The company has a quick ratio of 0.98, a current ratio of 1.12 and a debt-to-equity ratio of 1.37. The stock has a market capitalization of $821.31 million, a P/E ratio of -3.53 and a beta of 1.42. The stock's fifty day moving average price is $5.89 and its two-hundred day moving average price is $9.14. AdaptHealth has a twelve month low of $5.21 and a twelve month high of $13.43.

Analysts Set New Price Targets

Several research analysts recently weighed in on AHCO shares. Robert W. Baird cut their target price on AdaptHealth from $10.00 to $9.00 and set an "outperform" rating on the stock in a research report on Thursday, September 17th. Weiss Ratings reiterated a "sell (d)" rating on shares of AdaptHealth in a research note on Wednesday, August 19th. UBS Group dropped their target price on AdaptHealth from $14.00 to $10.00 and set a "buy" rating on the stock in a research report on Thursday, August 6th. Royal Bank Of Canada dropped their price objective on AdaptHealth from $15.00 to $8.00 and set an "outperform" rating on the stock in a report on Thursday, August 6th. Finally, Truist Financial reduced their target price on AdaptHealth from $14.00 to $9.00 and set a "buy" rating for the company in a research note on Wednesday, August 5th. Seven equities research analysts have rated the stock with a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average target price of $10.14.

Insider Buying and Selling

In related news, Director Kenneth Samet acquired 23,500 shares of the stock in a transaction that occurred on Thursday, August 6th. The shares were purchased at an average cost of $6.38 per share, with a total value of $149,930.00. Following the completion of the transaction, the director owned 48,569 shares of the company's stock, valued at approximately $309,870.22. This trade represents a 93.74% increase in their position. The purchase was disclosed in a filing with the SEC, which can be accessed through this link. Corporate insiders own 1.95% of the company's stock.

About AdaptHealth

AdaptHealth Corp. NASDAQ: AHCO is a provider of home medical equipment, supplies and related healthcare services in the United States. The company helps patients manage chronic conditions and recover from illness or injury outside of traditional healthcare facilities, working with individuals, caregivers, physicians and payers.

Its products and services include respiratory equipment and supplies, oxygen therapy, sleep therapy devices such as continuous positive airway pressure systems, diabetes management products, mobility and accessibility equipment, and other durable medical equipment.

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