Shares of Adeptus Health Inc. ADPT scaled a new 52-week high of $50.62 on Mar 27, eventually closing a tad bit lower at $50.13. This represents a strong one-year return of about 94.7%. The S&P 500 also jumped almost 11% during the same period.
We note that this Zacks Rank #3 (Hold) stock has a market cap of $494.38 million and a long-term expected EPS growth rate of 35%.
Key Growth Catalysts
Adeptus Health reported impressive revenue figures for fourth-quarter and full-year 2014, which justifies the bullish run. Total net operating revenue of $70.1 million surged more than 100% year over year and was in line with the Zacks Consensus Estimate in the fourth quarter.
The substantial upside can be primarily attributed to higher pension volumes resulting from the increase in the number of freestanding facilities which went up from 26 in the year-ago quarter to 55 in the reported quarter. Also, in the fourth quarter, number of patient visits increased 91.1% year over year to 47,643.
The Dignity Health Arizona General Hospital, which was started by Adeptus Health following the partnership with Dignity Health, received the CMS certification on Jan 30, 2015. We feel that the joint venture with Dignity Health in Arizona holds important long-term prospects for the company, reflecting Adeptus Health’s focus on penetrating new markets.
Adeptus Health initiated the construction of its second hospital in late 2014. The hospital in Carrollton, TX, is scheduled to open in late 2015. We are impressed with the fact that the company prioritizes increasing the number of freestanding facilities. This should continue to drive significant top-line growth.
Estimate Revisions
The Zacks Consensus Estimate for 2015 has remained steady at 57 cents per share over the past 30 days, which reflects significant growth as compared with 4 cents of loss reported in 2014. Similarly, the consensus estimate for fiscal 2016 has remained unchanged at $1.28 over the same period, which highlights 122% year-over-year growth.
Stocks to Consider
Better-ranked stocks in the sector are Inogen INGN, Abiomed ABMD and Luminex LMNX. While Inogen and Abiomed sport a Zacks Rank #1 (Strong Buy), Luminex carries a Zacks Rank #2 (Buy).
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