On Monday, JMP Securities initiated coverage on Addus HomeCare (NASDAQ:ADUS), assigning the stock a Market Outperform rating with a price target of $150.00. The firm's analysis anticipates Addus HomeCare's fourth-quarter 2024 revenue and adjusted EBITDA to reach $288.2 million and $35.5 million, respectively.
These projections include approximately one month of revenue from Gentiva and exclude revenue from New York operations. According to InvestingPro data, the company has demonstrated strong financial health with a current ratio of 2.11 and operates with moderate debt levels.
The firm further projects a significant increase in Addus HomeCare's financial performance for the year 2025, estimating revenue to rise by 22% year-over-year to $1.40 billion and adjusted EBITDA to grow by 27% year-over-year to $175.0 million.
The company's goal to maintain a minimum of 10% annual growth is viewed as achievable by JMP Securities, considering the company's solid organic growth and a robust pipeline of potential mergers and acquisitions targets across its three operating segments.
This aligns with the company's historical performance, as InvestingPro data shows a 5-year revenue CAGR of 15% and recent revenue growth of 10.15%.
JMP Securities' outlook suggests confidence in Addus HomeCare's growth strategy, particularly through its mergers and acquisitions, which are expected to contribute positively to the company's future financial results. The firm's price target reflects a bullish stance on the stock's potential performance in the market. Based on InvestingPro analysis, the stock is currently trading near its Fair Value, with strong financial health scores and eight additional ProTips available to subscribers.
The coverage initiation and price target set by JMP Securities come as Addus HomeCare continues to focus on expanding its services and reaching its growth objectives. The company's strategy aligns with the analyst's expectations for consistent growth in the coming years.
Investors and market watchers now have JMP Securities' perspective on Addus HomeCare's stock, providing a new data point for evaluating the company's market position and future potential.
The Market Outperform rating indicates a positive outlook for the stock relative to the broader market.
In other recent news, Addus HomeCare Corporation reported a successful third quarter in 2024, featuring a 7% increase in total revenue to $289.8 million and a 13% rise in adjusted earnings per share to $1.30.
The company's adjusted EBITDA also marked an improvement of 11.1% to $34.3 million. In a strategic move, Addus HomeCare has disclosed plans to acquire Gentiva Personal Care operations, which is anticipated to significantly boost its market presence and add an estimated $280 million to its annual revenues.
These recent developments also include positive hiring trends within the company, particularly in the Personal Care segment, which accounted for 74.3% of total revenue. The company's CEO, Dirk Allison, expressed confidence in the growth potential for home-based care, while CFO Brian Poff anticipates rate increases to normalize in the coming years.
Addus HomeCare is actively seeking more strategic acquisition opportunities and is optimistic about the potential expansion of Medicare coverage for personal care services. The company aims to maintain conservative financial leverage and flexibility while targeting a minimum annual revenue growth of 10%.
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