AdaptHealth Corp (AHCO) Stock Forecast & Price Target

AdaptHealth Corp demonstrated a robust performance in its Sleep segment, with a revenue increase of 3.4% year-over-year, signifying sustained growth in new patient starts and an expanding patient census. The company's strategic contract extensions and new capitated agreements position it for continued revenue growth, particularly in its broader geographic footprint and diverse product offerings, with expectations of increased capitated revenue through 2025. With impressive free cash flow reaching $235.8 million, a year-over-year increase of 64.7%, alongside improved leverage metrics and ongoing investments in technology and M&A, AdaptHealth is well-positioned for future financial stability and expansion.

AdaptHealth Corp is projected to experience a decline in revenue of 3% to 4% year-over-year in 2024, indicating weakness in the diabetes segment, which is expected to see a revenue drop of 4.2%. The company's adjusted EBITDA margins are forecasted to remain relatively flat year-over-year at 20.8%, suggesting the potential for decreased profitability as operating leverage remains constrained. Additionally, integration challenges from acquisitions and softness in revenue growth are anticipated, leading to a downward revision of revenue estimates to $3.230 billion and adjusted EBITDA of $672 million, which is notably below previous projections.