AdaptHealth (AHCO): Evaluating Valuation After Revenue Stalls and Earnings Guidance Misses

AdaptHealth (AHCO) investors had their attention grabbed this quarter after the company reported flat revenue growth compared to last year, missing both EPS estimates and its full-year EBITDA guidance. Missing these key benchmarks, especially on profitability, often triggers questions about management’s outlook and the business’s near-term momentum. For those weighing what to do with their shares, the latest results are a clear signal that something may have shifted in the market’s perception of risk around the stock. Looking at the broader picture, AdaptHealth’s stock has struggled to build momentum. Shares have dropped 15% over the past year and are down more than 50% over a three-year stretch. Even so, the stock managed an 8% gain in the past 3 months, which could suggest some stabilization or expectation resets. These moves arrived as AdaptHealth’s sector peers delivered stronger revenue growth and outperformed expectations, adding extra contrast to its recent flat performance. While the company did post double-digit annual net income growth, the flat topline and guidance miss dominated investor focus. With the price down and disappointment fresh in the air, investors have to ask whether this sets up a potential bargain or if the market is anticipating tougher times ahead for AdaptHealth.

Most Popular Narrative: 29.2% Undervalued

The widely followed analyst consensus views AdaptHealth as significantly undervalued based on future earnings potential and upcoming industry transformations.

"The newly signed five-year, $1+ billion exclusive capitated contract with a major national health system substantially increases AdaptHealth's long-term base of recurring revenue. This enables predictable growth as US healthcare continues to shift toward home-based delivery and value-focused payer arrangements. This is expected to drive significant topline revenue expansion beginning in 2026 and help stabilize net earnings through a higher mix of recurring and non-cyclical revenue."

Ready to discover what powers this bold undervaluation call? The narrative hinges on a blend of striking top-line projections, an imminent profitability surge, and a future market multiple that bucks industry trends. Want to uncover which ambitious financial forecasts are fueling that price target? Explore more to see the key drivers analysts believe set AdaptHealth apart.

Result: Fair Value of $13.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, significant regulatory changes or execution missteps could quickly undermine expectations for AdaptHealth’s earnings growth and future valuation potential.

Find out about the key risks to this AdaptHealth narrative.

Another View

Looking through the lens of our DCF model, AdaptHealth also appears undervalued given its future cash flow potential. When two distinct approaches point to the same conclusion, the question becomes whether this represents an opportunity or simply agreement on key assumptions.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out AdaptHealth for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own AdaptHealth Narrative

If you want to dig deeper or challenge these perspectives, you can easily review the numbers and craft your own take in just a few minutes with Do it your way.

A great starting point for your AdaptHealth research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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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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