Why Acadia Healthcare (ACHC) Is Down 9.8% After S&P MidCap 400 Index Removal and What’s Next

• Acadia Healthcare Company was recently announced for removal from the S&P MidCap 400 index as part of the quarterly index rebalancing, prompting trading activity tied to institutional investors and index funds.
• This index exclusion highlights how shifts in major benchmark indices can directly impact trading volumes and short-term sentiment, regardless of underlying business fundamentals.
• We'll review how forced index fund selling from this removal affects Acadia Healthcare's investment narrative and future outlook.

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Acadia Healthcare Company Investment Narrative Recap

Owning shares in Acadia Healthcare requires confidence in long-term demand for behavioral health services, supported by government programs and population trends. The recent announcement of Acadia’s removal from the S&P MidCap 400 index has brought short-term volatility, but it does not materially impact the company’s most important catalysts or the core risk of operating margin pressures related to Medicaid reimbursement policies and underperforming facilities.

Of recent company news, the Q2 2025 earnings release stands out, highlighting that while revenue grew to US$869.23 million (up year-on-year), net income dropped and management reaffirmed cautious guidance for the year. This financial update is relevant as it offers a direct view of operational execution and underlines the need to address expense challenges if new facility ramps lag behind expectations.

Yet, against these near-term moves, any investor eyeing Acadia must also weigh the ongoing threat of more restrictive Medicaid reimbursement policies and the potential impact on long-term profitability...

Read the full narrative on Acadia Healthcare Company (it's free!)

Acadia Healthcare Company's outlook anticipates $4.1 billion in revenue and $322.9 million in earnings by 2028. This implies an annual revenue growth rate of 8.3% and an increase in earnings of $183.7 million from the current $139.2 million.

Uncover how Acadia Healthcare Company's forecasts yield a $30.43 fair value, a 45% upside to its current price.

Exploring Other Perspectives

Every member of the Simply Wall St Community has set their fair value estimate for Acadia Healthcare at US$30.43 from 1 analysis. However, ongoing operating margin risks tied to Medicaid reimbursement remain a key factor that could sway broader performance, so check out the range of other investor views available.

Explore another fair value estimate on Acadia Healthcare Company - why the stock might be worth as much as 45% more than the current price!

Build Your Own Acadia Healthcare Company Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Acadia Healthcare Company research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Acadia Healthcare Company research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Acadia Healthcare Company's overall financial health at a glance.

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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.

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