Is Acadia Healthcare (ACHC) Now Undervalued After Its Steep 1-Year and 3-Year Share Price Declines?

Acadia Healthcare Company (ACHC) has been grinding lower for months, but its latest move has some investors wondering whether the selling has gone too far given the company’s underlying growth and profits.

See our latest analysis for Acadia Healthcare Company.

The stock’s 1-year total shareholder return of -62.04 percent and 3-year total shareholder return of -82.47 percent show that sentiment has deteriorated steadily. The steep 90-day share price return of -39.84 percent suggests that recent selling pressure has accelerated even as the underlying business continues to grow.

If Acadia’s drop has you rethinking your healthcare exposure, this could be a good moment to compare it with other names using our curated healthcare stocks.

With shares down sharply even as revenue and profits still grow, Acadia now trades at a steep discount to analyst targets. This raises the question: is this a contrarian buying opportunity, or is the market already pricing in weaker future growth?

Most Popular Narrative Narrative: 43.5% Undervalued

With Acadia Healthcare Company last closing at $14.30 versus a narrative fair value of $25.32, the spread suggests a sizable disconnect between price and expectations.

Accelerated facility development opening beds ahead of schedule, joint ventures with large healthcare systems, and ongoing expansion in high demand lines (comprehensive treatment centers, specialty care) are expected to support multiyear revenue growth and operational leverage, influencing revenue and earnings as new facilities ramp up.

Read the complete narrative.

Curious how steady expansion, rising margins, and a lower future earnings multiple can still indicate potential upside? The most popular narrative lays out a step by step roadmap for turning modest growth assumptions into a higher earnings base and a re rated valuation. The numbers behind that journey might be unexpected.

Result: Fair Value of $25.32 (UNDERVALUED)

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

However, softer Medicaid volumes and mounting legal costs could pressure margins and cash flow, which may undermine the upside case if execution and reimbursement trends disappoint.

Find out about the key risks to this Acadia Healthcare Company narrative.

Build Your Own Acadia Healthcare Company Narrative

If you see the story differently or want to dig into the numbers yourself, you can assemble a customized narrative in under three minutes: Do it your way.

A great starting point for your Acadia Healthcare Company research is our analysis highlighting 3 key rewards and 3 important warning signs 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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