Acadia Healthcare Company, Inc. (ACHC) | Investment Case

1. Company Snapshot

1.a. Company Description

Acadia Healthcare Company, Inc.provides behavioral healthcare services in the United States and Puerto Rico.The company offers behavioral healthcare services to its patients in various settings, including inpatient psychiatric hospitals, specialty treatment facilities, residential treatment centers, and outpatient clinics.

As of March 31, 2022, it operated a network of 238 behavioral healthcare facilities with approximately 10,600 beds.The company was founded in 2005 and is headquartered in Franklin, Tennessee.

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1.b. Last Insights on ACHC

Breaking News: Acadia Healthcare Company Inc faces a securities fraud investigation announced by The Law Offices of Frank R Cruz and Law Offices of Howard G Smith on behalf of investors who lost money. The investigation concerns possible violations of federal securities laws. Meanwhile, Edgestream Partners LP raised its stake in Acadia Healthcare by 137.7%. The company was downgraded to Underperform by Bank of America analysts due to rising legal and insurance costs. The price objective was lowered to $13. Analysts at Bank of America recommend a sell.

1.c. Company Highlights

Last Price	14
Change Percentage	-9.50%
Open	15.38
Previous Close	15.47
Market Cap ( Millions)	1291
Volume	2973673
Year High	47.08
Year Low	12.63
M A 50	20.83
M A 200	23.58

FCF Yield	2.41%
Dividend Yield	0.00%
ROE	4.56%
Debt / Equity	77.51%
Net Debt / EBIDTA	452.10%
Price To Book	0.41
Price Earnings Ratio	9.08
Price To FCF	41.55
Price To sales	0.4
EV / EBITDA	7.11

2. Acadia Healthcare's Q3 2025 Earnings: Navigating Softer Medicaid Volumes

Acadia Healthcare reported revenue of $851.6 million for Q3 2025, a 4.4% increase over the same period last year. However, adjusted EBITDA was $173 million, approximately $5 million below internal expectations. The company's EPS for the quarter was $0.72, beating estimates of $0.68. The softer-than-expected volumes in the Medicaid book of business, particularly in the acute care segment, were a significant contributor to the miss on adjusted EBITDA. Same-facility volume growth was 1.3%, about 100 basis points below expectations.

Publication Date: Nov -09

                                    📋 Highlights
                                    Revenue Growth:
                                                Q3 revenue reached $851.6 million, reflecting a 4.4% year-over-year increase.
Adjusted EBITDA Shortfall:
                                                Q3 adjusted EBITDA was $173 million, $5 million below internal expectations.
Same-Facility Volume Growth:
                                                Same-facility volume growth was 1.3%, 100 basis points below internal targets.
Facility Closures:
                                                5 facilities ceased operations due to misalignment with strategic priorities or underperformance.
Revised Full-Year Guidance:
                                                Adjusted EBITDA outlook reduced to $650–660 million (from $675–700 million), with revenue now expected at $3.28–3.3 billion.

                                

Operational Challenges and Strategic Adjustments

The company has taken decisive steps to optimize growth investments and its existing portfolio in response to the uncertain environment. This includes pausing several development projects that no longer project an acceptable return and prioritizing growth in markets with favorable reimbursement dynamics and strong demand fundamentals. As Chris Hunter noted, "We're focusing on capturing the growth opportunity currently embedded in the business, realigning our capital spending priorities, and optimizing our portfolio of existing facilities."

Revised Outlook and Future Prospects

Acadia Healthcare has revised its full-year 2025 revenue guidance to between $3.28 billion and $3.3 billion, and adjusted EBITDA to $650 million to $660 million, down from the prior outlook of $675 million to $700 million. The company expects same-facility volume growth to be at the low end of the prior outlook range of 2% to 3%. For 2026, the company anticipates adjusted EBITDA tailwinds from reduced startup losses, contributions from bed additions, and a modest EBITDA uplift from targeted facility closures.

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 5.0%. With a P/E Ratio of 12.66 and an EV/EBITDA of 8.13, the market appears to be pricing in moderate growth expectations. The company's ROE of 4.56% and ROIC of 5.29% indicate a relatively stable return profile. As the company navigates the challenges in the Medicaid segment and adjusts its strategy, investors will be watching for signs of improvement in volume growth and margin expansion.

3. NewsRoom

Securities Fraud Investigation Into Acadia Healthcare Company, Inc. (ACHC) Announced – Shareholders Who Lost Money Urged To Contact Glancy Prongay & Murray LLP, a Leading Securities Fraud Law Firm

Dec -04

Source: businesswire.com

Acadia Healthcare Company, Inc. (ACHC) Shareholders Who Lost Money – Contact Law Offices of Howard G. Smith About Securities Fraud Investigation

Dec -03

Source: businesswire.com

Acadia Healthcare downgraded on rising legal and insurance costs, shares drop

Dec -03

Source: proactiveinvestors.com

Securities Fraud Investigation Into Acadia Healthcare Company, Inc. (ACHC) Announced – Shareholders Who Lost Money Urged to Contact The Law Offices of Frank R. Cruz

Dec -03

Source: businesswire.com

Acadia Healthcare downgraded on rising legal and insurance costs, shares drop

Dec -03

Source: proactiveinvestors.com

Acadia Healthcare Cuts 2025 Outlook After Liability Bomb Went Off

Dec -03

Source: zacks.com

This Healthcare Stock Plunges 31%. Why Its Legal Costs Are Set to Double.

Dec -03

Source: barrons.com

Here Are Wednesday’s Top Wall Street Analyst Upgrades and Downgrades: American Eagle Outfitters, Equinix, Garmin, Honeywell, Uber, Wendy’s and More

Dec -03

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.46%)

6. Segments

Acute Inpatient Psychiatric Facilities

Expected Growth: 9%

Acadia Healthcare's Acute Inpatient Psychiatric Facilities segment growth is driven by increasing demand for mental health services, aging population, and shortage of psychiatric beds. Additionally, the company's strategic acquisitions, expanded payer contracts, and improved operational efficiencies contribute to the 9% growth rate.

Specialty Treatment Facilities

Expected Growth: 8%

Acadia Healthcare's Specialty Treatment Facilities segment growth is driven by increasing demand for behavioral health services, expansion of existing facilities, and strategic acquisitions. Additionally, the company's focus on providing high-quality, patient-centered care and its ability to navigate regulatory changes have contributed to its 8% growth rate.

Comprehensive Treatment Centers

Expected Growth: 11%

Acadia Healthcare's Comprehensive Treatment Centers segment growth is driven by increasing demand for opioid treatment services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on providing high-quality patient care, investing in technology, and building strong relationships with healthcare providers and payers contribute to its 11% growth rate.

Residential Treatment Centers

Expected Growth: 12%

Acadia Healthcare's Residential Treatment Centers segment growth is driven by increasing demand for behavioral health services, expansion of existing facilities, and strategic acquisitions. Additionally, the company's focus on quality care and patient outcomes, as well as its ability to navigate regulatory changes, contribute to its 12% growth rate.

7. Detailed Products

Behavioral Health Services

Acadia provides a range of behavioral health services, including inpatient and outpatient care, for individuals struggling with mental health and substance abuse issues.

Addiction Treatment Services

Acadia offers specialized addiction treatment services, including detoxification, rehabilitation, and aftercare programs, to help individuals overcome addiction.

Autism Services

Acadia provides autism services, including diagnostic assessments, therapy, and behavioral interventions, to support individuals with autism spectrum disorder (ASD).

Eating Disorders Treatment

Acadia offers specialized treatment programs for individuals struggling with eating disorders, including anorexia nervosa, bulimia nervosa, and binge eating disorder.

Medication-Assisted Treatment (MAT)

Acadia provides medication-assisted treatment (MAT) programs, which combine medication with counseling and behavioral therapies to treat opioid use disorder.

Outpatient Services

Acadia offers outpatient services, including counseling, therapy, and medication management, for individuals who require ongoing support and treatment.

8. Acadia Healthcare Company, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Acadia Healthcare Company, Inc. is medium due to the availability of alternative mental health services and treatment options.

Bargaining Power Of Customers

The bargaining power of customers for Acadia Healthcare Company, Inc. is low due to the lack of negotiating power of individual patients and the complexity of mental health services.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Acadia Healthcare Company, Inc. is medium due to the presence of multiple suppliers of goods and services, but the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants for Acadia Healthcare Company, Inc. is low due to the high barriers to entry, including regulatory hurdles and the need for specialized expertise and facilities.

Intensity Of Rivalry

The intensity of rivalry for Acadia Healthcare Company, Inc. is high due to the presence of several established competitors in the mental health services industry, leading to a competitive market.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	33.46%
Debt Cost	8.80%
Equity Weight	66.54%
Equity Cost	10.53%
WACC	9.95%
Leverage	50.29%

11. Quality Control: Acadia Healthcare Company, Inc. passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Amedisys

A-Score: 5.2/10

Value: 4.0

Growth: 4.6

Quality: 6.9

Yield: 0.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

Ensign Group

A-Score: 5.0/10

Value: 2.0

Growth: 7.6

Quality: 4.4

Yield: 0.0

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

Option Care Health

A-Score: 4.4/10

Value: 4.5

Growth: 7.3

Quality: 5.2

Yield: 0.0

Momentum: 3.0

Volatility: 6.7

1-Year Total Return ->

Chemed

A-Score: 4.2/10

Value: 2.9

Growth: 6.1

Quality: 7.3

Yield: 0.0

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

Select Medical

A-Score: 3.8/10

Value: 6.8

Growth: 4.3

Quality: 2.5

Yield: 3.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

Acadia Healthcare

A-Score: 3.0/10

Value: 5.6

Growth: 4.1

Quality: 4.8

Yield: 0.0

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

21.61%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.95%

Acadia Healthcare Company, Inc. - US00404A1097

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ACHC

1.c. Company Highlights

Less Volatile

Stable Momentum

Average Growth

Earnings Beats

Revenues Miss

Average Quality

Average Yield

Revenues Beats

Fairly Valued

Medium Volatility

Earnings Miss

Weak Momentum

2. Acadia Healthcare's Q3 2025 Earnings: Navigating Softer Medicaid Volumes

Operational Challenges and Strategic Adjustments

Revised Outlook and Future Prospects

Valuation and Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.46%)

6. Segments

Acute Inpatient Psychiatric Facilities

Expected Growth: 9%

Specialty Treatment Facilities

Expected Growth: 8%

Comprehensive Treatment Centers

Expected Growth: 11%

Residential Treatment Centers

Expected Growth: 12%

7. Detailed Products

Behavioral Health Services

Addiction Treatment Services

Autism Services

Eating Disorders Treatment

Medication-Assisted Treatment (MAT)

Outpatient Services

8. Acadia Healthcare Company, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Acadia Healthcare Company, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.0$

Current Price

14$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA