A month has elapsed since Acadia Healthcare (ACHC) last released its earnings report. During this time, the company's shares have experienced a decline of approximately 3.3%, underperforming the S&P 500. The question now arises: will the recent negative trend persist leading up to the next earnings release, or is Acadia Healthcare on the verge of a breakout? To gain a better understanding of the important catalysts, let's take a quick look at its most recent earnings report.

Unraveling Acadia Healthcare's Earnings Journey

Acadia Healthcare's Q3 Earnings Beat Estimates

In the third quarter, Acadia Healthcare reported adjusted earnings per share of 91 cents, surpassing the Zacks Consensus Estimate by 1.1%. However, the bottom line remained flat year over year. Total revenues increased by 8.7% year over year to $815.6 million, but fell slightly short of the consensus mark. The third-quarter earnings were boosted by improved volumes and higher patient days.Same-facility revenues of $802.6 million rose 8.6% year over year, although it missed the estimated $808.6 million. The year-over-year improvement was driven by a 3.6% growth in revenue per patient day and a 4.7% increase in patient days. Admissions grew by 2% year over year, and the average length of stay increased by 2.7% year over year. However, it fell slightly short of the growth estimate of 3%.In the overall facility, patient days improved by 4.6% year over year, while admissions grew by 2.4% year over year. Revenue per patient day improved by 3.9% year over year, which was higher than the estimated 2.6%. The average length of stay rose by 2.1% year over year but lagged behind the growth estimate of 3.5%. Adjusted EBITDA climbed 10.5% year over year to $194.3 million, although it was lower than the estimated $195.4 million. The adjusted EBITDA margin deteriorated by 50 basis points year over year to 28.2%.Total expenses of $717.1 million decreased by 30.9% year over year but were higher than the estimated $699.1 million. The year-over-year decrease was due to a legal settlements expense recognized in the prior-year quarter and lower transaction, legal, and other costs.At the end of the third quarter, Acadia Healthcare had cash and cash equivalents of $82.1 million, which decreased by 17.9% from the 2023-end level. It had a leftover capacity of $321.5 million under its $600 million revolving credit facility. Total assets of $5.9 billion increased by 9.5% from the 2023-end figure. Long-term debt amounted to $1.8 billion, increasing by 34.4% from the December 31, 2023, level. The current portion of long-term debt was $71.7 million. Total equity of $3 billion increased by 9% from the 2023-end level, and the net leverage ratio was around 2.5X at the end of the third quarter.Net cash provided by operations totaled $13 million in the first nine months of 2024, compared to $346 million in the prior-year comparable period.

Acadia Healthcare's Expansion and Future Projections

In the third quarter, Acadia Healthcare added 15 beds to its existing facilities and inaugurated one acute care hospital in Madison, WI. Revenues are now projected to be between $3.15 billion and $3.165 billion, compared to the earlier guided range of $3.18-$3.225 billion. The mid-point of the updated outlook indicates an improvement of 7.8% from the 2023 figure.Adjusted EBITDA is estimated to be in the range of $725-$735 million, compared to the previous guidance of $735-$765 million. The mid-point of the revised outlook indicates 7.7% growth from the 2023 figure.Adjusted earnings per share (EPS) are predicted to be between $3.35 and $3.45, compared to the earlier guided range of $3.45 and $3.65. Interest expenses are still estimated to be within the band of $110-$120 million, depreciation and amortization expenses are anticipated to be in the $145-$155 million range, and the tax rate is expected to be in the range of 24.5-25.5%. Stock compensation expenses are still expected to be between $40 million and $45 million. Operating cash flows are forecasted to be in the range of $525-$550 million, and expansion capital expenditure is anticipated to be between $550 million and $595 million. Maintenance and IT capital expenditures are expected to be in the range of $95-$105 million.Management still plans to add more than 400 beds to existing facilities in 2024 and aims to inaugurate a maximum of 14 comprehensive treatment centers. ACHC anticipates opening three inpatient facilities in the fourth quarter of 2024, including two new joint venture facilities.In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted by -13.18% due to these changes. At present, Acadia Healthcare has a subpar Growth Score of D and a grade of C on the value side, placing it in the middle 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of D. If you are not focused on a specific strategy, this score is the one you should be interested in. Estimates for the stock have been broadly trending downward, and the magnitude of these revisions indicates a downward shift. It is no surprise that Acadia Healthcare has a Zacks Rank #5 (Strong Sell), and we expect a below-average return from the stock in the next few months.If you want the latest recommendations from Zacks Investment Research, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.Acadia Healthcare Company, Inc. (ACHC) : Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research