Addus HomeCare (ADUS) Stock Forecast & Price Target

Addus HomeCare Corp's positive outlook is supported by anticipated strong revenue growth across its segments, particularly in hospice services, which are projected to see growth at the high end of 5-7% due to improved admissions and rate increases. The company's strategy to optimize its home health segment has resulted in a steady revenue increase, while management expects personal care services to grow by 3-5% in 2025 as Medicaid redetermination disruptions stabilize, leading to greater admissions. Furthermore, upward revisions in consensus estimates for revenue, EBITDA, and EPS since the announcement of the Gentiva deal indicate strong market confidence in Addus HomeCare's future performance, aligning with its aggressive M&A strategy aimed at achieving a 10% revenue growth target.

Addus HomeCare Corp is experiencing negative trends in its Home Health segment, evidenced by a year-over-year decline of -3.2% in same-store volumes and a significant drop in new admissions by -6.2%, resulting in revenues falling short of expectations by -2.7%. The company anticipates a slight decrease in its Personal Care Services segment's average hourly rate due to the integration of Gentiva and challenging reimbursement rates in Texas, which could further pressure profitability. Additionally, a projected 200-basis point compression in gross margins, coupled with lowered adjusted EBITDA estimates for 2025 through 2027, raises concerns about the sustainability of financial performance moving forward.