Acadia Healthcare (ACHC, Financial) shares experienced a notable decline, falling by 23.77%. This drop can be attributed to the company's underwhelming fourth-quarter financial results and lower-than-expected revenue guidance for the upcoming quarter.
Currently trading at $30.69, ACHC has seen a significant negative price change of -9.57. The market cap stands at $2.85 billion, reflecting investor concerns about the company's financial performance. Despite the setback, ACHC's price-to-earnings (P/E) ratio is 10.06, which is relatively close to its three-year low, indicating potential value in its current valuation.
The company has a severe warning sign, the Altman Z-score of 1.72, placing it in the distress zone, suggesting a possibility of bankruptcy in the near future. However, the Beneish M-Score of -2.37 indicates that Acadia Healthcare is unlikely to be a financial manipulator, which can provide some confidence to investors.
On a positive note, Acadia Healthcare's operating margin is expanding, a sign of improving profitability. Moreover, the stock's price is close to its three-year low, which could present a buying opportunity for value investors. The current price is below the GF Value of $86.44, suggesting that the stock might be undervalued according to GuruFocus's proprietary valuation method.
Achieving growth remains a challenge, as indicated by negative cash flow growth over the last year. However, Acadia Healthcare's revenue growth has been steady, with a 1-year growth rate of 8.5%. Looking forward, investors may want to consider whether ACHC can improve its financial stability and capitalize on its operating margin expansion.
For further information about Acadia Healthcare's valuation, visit the GF Value page.
