Will Rising Expenses Hurt Acadia Healthcare's Q1 Earnings?

Acadia Healthcare Company, Inc. ACHC is set to report first-quarter 2025 results on May 12, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 42 cents per share on revenues of $770.5 million.

First-quarter earnings estimates declined 8 cents per share in the past 60 days. The bottom-line estimate indicates a year-over-year decrease of 50%. However, the Zacks Consensus Estimate for the Behavioral healthcare service provider's quarterly revenues implies year-over-year growth of 0.3%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

For 2025, the Zacks Consensus Estimate for Acadia Healthcare’s revenues is pegged at $3.33 billion, implying a year-over-year rise of 5.7%. But the consensus mark for current-year EPS is pegged at $2.76, implying a fall of 16.4% on a year-over-year basis.

Acadia Healthcare beat the consensus estimate for earnings in three of the last four quarters and missed once, the average surprise being negative 0.4%. This is depicted in the figure below.

Acadia Healthcare Company, Inc. Price and EPS Surprise

 

Acadia Healthcare Company, Inc. price-eps-surprise | Acadia Healthcare Company, Inc. Quote

Q1 Earnings Whispers for ACHC

Our proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat, but that is not the case here.

ACHC has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

What is Shaping ACHC’s Q1 Results?

The Zacks Consensus Estimate and our model estimate for revenue per patient day imply a 2% year-over-year rise. Also, both the consensus estimate and our model estimate for Residential Treatment Centers’ revenues indicate a 9.7% jump from the year-ago level of $85.6 million.

Both estimates for U.S. same-facility admissions indicate a marginal increase from a year ago. Similarly, both the Zacks Consensus Estimate and our model estimate for Specialty Treatment Facilities’ revenues signal a 0.1% increase from the year-ago figure of $143.8 million.

While the above-mentioned factors are likely to have supported Acadia Healthcare’s first-quarter revenues, rising expenses are likely to have affected its profit levels, making an earnings beat uncertain. We expect total expenses to have increased more than 11% in the to-be-reported quarter due to higher salaries, wages and benefits, professional fees and other operating costs. Also, with rising utilization, supply costs are expected to have increased in the first quarter.

Both the Zacks Consensus Estimate and our model estimate for Acute Inpatient Psychiatric Facilities’ revenues signal a 1.3% decrease from the year-ago figure of $401.1 million. The Zacks Consensus Estimate and our model estimate for U.S. same-facility patient days signal a 1.1% year-over-year decrease. Also, we expect the average length of stay to have fallen 1% year over year. Both the consensus estimate and our model estimate for Comprehensive Treatment Centers’ revenues indicate a 0.5% fall from the year-ago figure of $132.2 million.

How Did Other Stocks Perform?

Here are some stocks in the broader Medical space that have already reported earnings for this quarter — HCA Healthcare, Inc. HCA, Encompass Health Corporation EHC and Tenet Healthcare Corporation THC.

HCA Healthcare reported first-quarter 2025 adjusted EPS of $6.45, which outpaced the Zacks Consensus Estimate of $5.77 on the back of higher patient volumes, which led to an increased number of inpatient surgeries, emergency room visits and same-facility emergency room visits. However, the upside was partly offset by elevated salaries and benefits expenses and other operating expenses.

Encompass Health reported first-quarter 2025 adjusted EPS of $1.37, which outpaced the Zacks Consensus Estimate by 15.1%, aided by strong net patient revenue per discharge and capacity expansion measures. However, the upside was partly offset by an elevated operating expense level due to increased salaries, benefits and other operating costs.

Tenet Healthcare reported first-quarter 2025 adjusted EPS of $4.36, which outpaced the Zacks Consensus Estimate by 40.2% thanks to strong same-hospital admissions, higher net revenue per case, a favorable payer mix and disciplined expense management efforts. Growth in the Ambulatory Care segment was further supported by facility buyouts and expanded service lines. However, the upside was partly offset by a sharp rise in total operating costs.

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This article originally published on Zacks Investment Research (zacks.com).

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