Addus HomeCare (ADUS) shares soared 4.9% in the last trading session to close at $101. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.7% gain over the past four weeks.The upside can be attributed to relief-rally across global markets following the announcement of a 90-day pause on tariff hike by the United States.This provider of home-based personal care, nursing and rehabilitative therapy services is expected to post quarterl ...

Addus HomeCare (ADUS) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.Since a cha ...

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental ...

Investors in Addus HomeCare Corporation (ADUS) need to pay close attention to the stock based on moves in the options market lately. That is because the Apr 17, 2025 $60.00 Put had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It c ...

Financial Performance - For the year ended December 31, 2024, total net service revenue increased to $1,154,599,000 from $1,058,651,000 in 2023, representing a growth of approximately 9.1%[22] - Net income for 2024 was $73,598,000, compared to $62,516,000 in 2023, marking a year-over-year increase of approximately 17.5%[22] - Adjusted EBITDA for 2024 was $140,290,000, up 15.9% from $121,020,000 in 2023[214] - Total assets increased to $1,412,634,000 in 2024, up from $1,024,426,000 in 2023, reflecting a growth of 37.9%[214] Revenue Sources - For the year ended December 31, 2024, approximately 61.8% of net service revenues were derived from state and local governmental agencies, primarily through Medicaid state programs, and 22.2% from Medicare[136] - The personal care segment generated $856,581,000 in revenue for 2024, up from $794,718,000 in 2023, reflecting an increase of about 7.8%[22] - Managed care revenues accounted for 34.8% of total revenue in 2024, compared to 36.0% in 2022[212] - The company derived approximately 21.0% and 20.9% of its revenue from the Illinois Department on Aging programs for the years ended December 31, 2024 and 2023, respectively[125] Workforce and Employee Engagement - As of December 31, 2024, the total workforce consists of 49,703 employees, including 5,548 full-time caregivers and 43,517 part-time caregivers[69] - Approximately 34.8% of total employees, or 17,283 individuals, are represented by labor unions, with strong relationships maintained through collective bargaining agreements[71] - The annual employee engagement survey indicated an 80% satisfaction rating for work-life balance among employees[70] - Addus has implemented various employee development programs, including Ignite and Emerge, aimed at leadership development and skill enhancement[74] Growth Strategy and Market Position - The company plans to continue driving organic growth through enhanced sales and marketing capabilities, technology investments, and recruiting efforts[31] - The company is strategically expanding its service offerings to include hospice and home health, increasing its value to managed care partners[32] - The company is well-positioned to capitalize on industry consolidation trends, leveraging its reputation and strong payor relationships[25] - The company expects to derive a significant portion of its revenues from Texas going forward as a result of the Gentiva Acquisition[124] Regulatory Environment - The personal care services industry is subject to increasing regulation, which may impact operational requirements and market entry for new providers[26] - The company is subject to extensive federal and state regulations, which may impact service offerings and operational costs[85] - The federal government and many states are implementing strategies to reduce Medicaid expenditures, impacting reimbursement rates and coverage[58] - The company is required to offer a minimum level of health coverage for 95% of full-time employees in 2024 or face annual penalties[165] Challenges and Risks - Economic conditions in the U.S. have led to increased competition for caregivers and skilled healthcare staff, impacting the company's ability to attract and retain employees[117] - Labor costs represent the most significant component of the company's total expenditures, and increases in labor costs could significantly harm its business[129] - The company faces a highly competitive environment with various service providers, which may limit its ability to attract referrals and increase market share[151] - The company may face challenges in pursuing acquisitions or expanding into new regions without obtaining additional capital or lender consent[115] Technology and Cybersecurity - The company utilizes the Qlik Business Intelligence platform for operational performance analysis, integrating personal care and hospice segments to measure performance against budget[83] - Cybersecurity threats are increasing, with the company regularly targeted by attempted attacks, which could lead to data breaches and operational disruptions[185] - The company has invested in security measures and protocols to protect sensitive information, but risks remain due to third-party service providers[184] - The company relies on external service providers for critical information systems, increasing vulnerability to operational disruptions[176] Future Outlook - The company plans for significant growth through service expansion in existing markets and potential entry into new markets, which may require additional qualified personnel and resources[111] - The demand for home care services is expected to grow due to the aging U.S. population and a preference for home-based care over institutional settings[24] - The transition to managed care plans for Medicaid enrollees may increase competition for contracts and could negatively affect revenue growth rates and cash flow[149] - The company anticipates an increase in legal challenges to healthcare regulations following recent U.S. Supreme Court decisions[165]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $297.1 million, an increase of 7.5% compared to $276.4 million in Q4 2023 [20] - Adjusted earnings per share for Q4 2024 was $1.38, up 4.6% from $1.32 in Q4 2023 [20] - Adjusted EBITDA for Q4 2024 was $37.8 million, a 10.3% increase from $34.3 million in Q4 2023 [20] - For the full year 2024, total revenue was $1.2 billion, a 9.1% increase from $1.1 billion in 2023 [21] - Adjusted EBITDA for 2024 was $140.3 million, up 15.9% from $121 million in 2023 [21] Business Line Data and Key Metrics Changes - Personal care revenues for Q4 2024 were $216.9 million, accounting for 73.8% of total revenue [52] - Hospice care revenues were $59 million, representing 20.1% of total revenue [52] - Home health revenues were $17.8 million, making up 6.1% of total revenue [52] - Same store revenue growth for personal care was 5.8% in Q4 2024 compared to Q4 2023 [35] - Hospice same store revenue increased by 7.8% year-over-year [37] - Home health segment returned to positive growth with a 1.6% increase compared to Q4 2023 [39] Market Data and Key Metrics Changes - Illinois enacted a 5.5% rate increase for personal care services effective January 1, 2025, expected to contribute approximately $23 million in annualized revenue [34][47] - The company experienced solid caregiver hiring success, with personal care hiring at 76 hires per day, up from 74 hires per day in Q4 2023 [30] Company Strategy and Development Direction - The company is focused on expanding services related to home care, which is seen as valuable to both states and Congress [18] - The Gentiva acquisition is a significant part of the growth strategy, adding approximately $280 million in annualized revenues [50] - The company aims for a targeted minimum annual revenue growth of 10% despite the larger revenue base [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the potential impact of Medicaid program changes, believing that their services reduce overall costs to state Medicaid programs [16][19] - The company is well-positioned to handle potential changes in Medicaid funding due to its low-cost provider status [99] - Management anticipates continued growth in personal care services, aiming for a revenue increase of 3% to 5% in 2025 [72] Other Important Information - The company had cash on hand of approximately $100 million as of the end of 2024 [22] - A one-time write-off of approximately $4.9 million was taken in Q4 2024 related to excess corporate office space [29] - The company maintains a conservative leverage position at just under one times Adjusted EBITDA, allowing flexibility for strategic acquisitions [23] Q&A Session Summary Question: Average revenue per hour in Q4 and its impact - The average revenue per hour is expected to be slightly down due to the Gentiva deal and the lower reimbursement rate in Texas [67] Question: Organic volume growth in personal care - Organic volume growth in personal care was slightly up, with expectations to reach the higher end of the 3% to 5% growth range in 2025 [72][74] Question: Impact of work requirements on business - The majority of clients served are elderly and disabled, so work requirements would have negligible direct effects, potentially increasing caregiver availability [83] Question: Integration of Gentiva and its impact on cash flow - The integration of Gentiva is progressing smoothly, with no significant impact on cash flow conversion expected [119] Question: Expected margin decline from Q4 to Q1 - A 200 basis point margin decline is anticipated, primarily due to the mix shift from Gentiva and annual resets of payroll taxes [54][109]

Core Insights - Addus HomeCare (ADUS) reported revenue of $297.14 million for the quarter ended December 2024, reflecting a year-over-year increase of 7.5% and a surprise of +1.71% over the Zacks Consensus Estimate of $292.16 million [1] - The company's EPS for the quarter was $1.38, which is an increase from $1.32 in the same quarter last year, aligning with the consensus EPS estimate [1] Revenue Breakdown - Personal Care revenue reached $220.33 million, exceeding the average estimate of $203.82 million by two analysts, representing a year-over-year change of +7.7% [4] - Home Health revenue was reported at $17.83 million, slightly above the average estimate of $17.29 million, marking a +4.1% year-over-year increase [4] - Hospice revenue totaled $58.99 million, surpassing the estimated $58.01 million, with a year-over-year change of +7.8% [4] Stock Performance - Over the past month, Addus HomeCare shares have returned -16.4%, compared to a -0.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Core Insights - Addus HomeCare (ADUS) reported quarterly earnings of $1.38 per share, matching the Zacks Consensus Estimate and showing an increase from $1.32 per share a year ago [1] - The company achieved revenues of $297.14 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 1.71% and up from $276.35 million year-over-year [2] - Addus HomeCare has surpassed consensus EPS estimates three times over the last four quarters and topped revenue estimates four times in the same period [2] Earnings Performance - The company had a surprise of 0.78% in the previous quarter, with actual earnings of $1.30 per share against an expected $1.29 [1] - The current consensus EPS estimate for the upcoming quarter is $1.34, with projected revenues of $349.36 million, and for the current fiscal year, the estimate is $6 on $1.42 billion in revenues [7] Market Position - Addus HomeCare shares have underperformed the market, losing about 12.9% since the beginning of the year, while the S&P 500 has gained 2.2% [3] - The company currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [6] Industry Outlook - The Medical - Outpatient and Home Healthcare industry, to which Addus HomeCare belongs, is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net service revenues for Q4 2024 were $297.1 million, a 7.5% increase from $276.4 million in Q4 2023[4] - Net income for Q4 2024 was $19.5 million, with diluted earnings per share of $1.07, compared to $19.6 million and $1.20 per share in Q4 2023[4] - Adjusted EBITDA for Q4 2024 increased by 10.3% to $37.8 million from $34.3 million in Q4 2023[4] - The full year 2024 net service revenues reached $1.15 billion, a 9.1% increase from $1.06 billion in 2023[4] - Adjusted net income for the full year 2024 was $91.4 million, up from $74.8 million in 2023, with adjusted net income per diluted share increasing to $5.26 from $4.58[4] - Net income for the twelve months ended December 31, 2024, was $73.6 million, up from $62.5 million in 2023, representing a 17.0% increase[25] - Operating income for the twelve months ended December 31, 2024, was $102.7 million, compared to $91.0 million in 2023, marking a 12.5% increase[26] - For the three months ended December 31, 2024, net income was $19,526,000 compared to $19,578,000 for the same period in 2023, while for the twelve months, net income increased to $73,598,000 from $62,516,000[32] - Adjusted EBITDA for the three months ended December 31, 2024, was $37,771,000, up from $34,255,000 in the same period of 2023, and for the twelve months, it rose to $140,290,000 from $121,020,000[32] Revenue Breakdown - Personal care services accounted for 74.1% of total revenue in Q4 2024, with an organic revenue growth rate of 5.8% year-over-year[6] - Hospice services represented 19.9% of total revenue in Q4 2024, with organic revenue growth of 7.8% compared to the previous year[9] - Personal Care segment revenues increased to $220.3 million in Q4 2024, a 7.9% rise from $204.5 million in Q4 2023[27] - Hospice segment revenues grew by 7.5% to $58.9 million in Q4 2024, compared to $54.7 million in Q4 2023[27] Assets and Equity - Total assets increased to $1.41 billion as of December 31, 2024, from $1.02 billion in 2023, reflecting a 37.9% growth[25] - Total stockholders' equity rose to $970.5 million in 2024, up from $706.7 million in 2023, indicating a 37.4% increase[25] Cash and Liquidity - Cash and liquidity as of December 31, 2024, included $98.9 million in cash and $223.0 million in bank debt, with a revolving credit facility capacity of $577.7 million[10] - Cash at the end of Q4 2024 was $98.9 million, up from $64.8 million at the end of Q4 2023[25] Acquisitions and Growth Strategy - The acquisition of Gentiva personal care operations added approximately $280 million in annualized revenues and expanded market coverage in seven states[11] - The company anticipates additional acquisition opportunities in 2025, focusing on markets that align with its strategic growth initiatives[12] Operational Metrics - Revenue per billable hour for the three months ended December 31, 2024, was $26.40, slightly down from $26.53 in the same period of 2023[32] - Organic revenue growth for Personal Care was 5.8% for the three months ended December 31, 2024, compared to 11.2% in the same period of 2023[32] - Average daily census for Hospice increased to 3,472 in the three months ended December 31, 2024, compared to 3,381 in the same period of 2023[32] - Total patient days for Hospice reached 319,460 for the three months ended December 31, 2024, up from 311,015 in the same period of 2023[32] - New admissions in Home Health were 4,365 for the three months ended December 31, 2024, compared to 4,654 in the same period of 2023[32] - The average billable census for acquisitions was 14,581 for the three months ended December 31, 2024, with no prior year comparison available[32] - The percentage of revenues from state, local, and other governmental programs in Personal Care increased to 54.2% for the three months ended December 31, 2024, from 50.5% in the same period of 2023[32] Adjusted Financial Metrics - Adjusted EBITDA is defined as earnings before net interest expense, taxes, depreciation, and other non-recurring costs, providing insight into the company's operating performance[1] - Adjusted Net Income excludes acquisition expenses and other non-recurring costs, offering a clearer view of the company's profitability[2] - Adjusted diluted earnings per share is calculated by adjusting for acquisition expenses and other non-recurring costs, reflecting the company's earnings more accurately[3] - Adjusted net service revenues are revenue figures adjusted for the closure of certain sites, highlighting the impact of operational changes on revenue[4]

Core Viewpoint - Addus HomeCare (ADUS) has experienced significant selling pressure, resulting in a 16.4% decline in stock price over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Stock Performance and Technical Indicators - ADUS is currently in oversold territory, indicated by an RSI reading of 26.62, suggesting a potential reversal in stock price trends [5] - The Relative Strength Index (RSI) is a momentum oscillator that helps identify oversold conditions when the reading falls below 30 [2][3] Group 2: Earnings Estimates and Analyst Sentiment - Over the last 30 days, the consensus EPS estimate for ADUS has increased by 0.6%, indicating a positive trend in earnings revisions [6] - ADUS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [7]