Stock Analysis

Market Participants Recognise Acadia Healthcare Company, Inc.'s (NASDAQ:ACHC) Revenues

With a median price-to-sales (or "P/S") ratio of close to 1x in the Healthcare industry in the United States, you could be forgiven for feeling indifferent about Acadia Healthcare Company, Inc.'s (NASDAQ:ACHC) P/S ratio of 0.6x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

See our latest analysis for Acadia Healthcare Company

ps-multiple-vs-industry
NasdaqGS:ACHC Price to Sales Ratio vs Industry July 28th 2025
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What Does Acadia Healthcare Company's P/S Mean For Shareholders?

With revenue growth that's inferior to most other companies of late, Acadia Healthcare Company has been relatively sluggish. One possibility is that the P/S ratio is moderate because investors think this lacklustre revenue performance will turn around. You'd really hope so, otherwise you're paying a relatively elevated price for a company with this sort of growth profile.

If you'd like to see what analysts are forecasting going forward, you should check out our free report on Acadia Healthcare Company.

Is There Some Revenue Growth Forecasted For Acadia Healthcare Company?

In order to justify its P/S ratio, Acadia Healthcare Company would need to produce growth that's similar to the industry.

Taking a look back first, we see that the company managed to grow revenues by a handy 5.5% last year. Pleasingly, revenue has also lifted 33% in aggregate from three years ago, partly thanks to the last 12 months of growth. Accordingly, shareholders would have definitely welcomed those medium-term rates of revenue growth.

Looking ahead now, revenue is anticipated to climb by 8.3% each year during the coming three years according to the analysts following the company. With the industry predicted to deliver 7.1% growth each year, the company is positioned for a comparable revenue result.

In light of this, it's understandable that Acadia Healthcare Company's P/S sits in line with the majority of other companies. It seems most investors are expecting to see average future growth and are only willing to pay a moderate amount for the stock.

What Does Acadia Healthcare Company's P/S Mean For Investors?

Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

We've seen that Acadia Healthcare Company maintains an adequate P/S seeing as its revenue growth figures match the rest of the industry. At this stage investors feel the potential for an improvement or deterioration in revenue isn't great enough to push P/S in a higher or lower direction. Unless these conditions change, they will continue to support the share price at these levels.

Don't forget that there may be other risks. For instance, we've identified 1 warning sign for Acadia Healthcare Company that you should be aware of.

It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.