AdaptHealth Corp (AHCO) Stock Forecast & Price Target

AdaptHealth Corp has demonstrated robust performance in its Sleep segment, reporting a year-over-year revenue growth of 3.4% and maintaining steady new patient starts in excess of 120,000 for three consecutive quarters. The company has also shown strong financial flexibility by reducing its term loan balance by approximately $50 million, with net leverage improving towards its target, while Free Cash Flow reached $235.8 million, reflecting a significant 64.7% increase from the previous year. With ongoing investments in technology and strategic mergers and acquisitions like AeroCare, AdaptHealth is well-positioned to enhance its national footprint and drive substantial topline growth in a fragmented market.

AdaptHealth Corp is projecting a revenue decline of 3% to 4% year-over-year in the first quarter, primarily driven by a weak performance in its Diabetes segment, which is anticipated to see a 4.2% decrease. The adjusted EBITDA margins are expected to remain flat at 20.8%, reflecting challenges in achieving operating leverage and potential integration issues from acquisitions, leading to a reduction in overall adjusted EBITDA from $691 million to approximately $672 million. Furthermore, the company's adjusted revenue forecast has been downgraded from $3.309 billion to $3.230 billion, indicating persistent struggles within certain segments and concerns over future financial stability.