Shares of Adeptus Health Inc. ADPT attained a new 52-week high of $73.52 on Jun 1, 2015, eventually closing lower at $72.84. This represents an impressive one-year return of about 94.8%. The S&P 500 jumped almost 2.6% during the same period.
The company owns and operates a network of independent freestanding emergency rooms in the U.S. It appears that better-than-expected first quarter results and new vital contract wins are working in favor of the company. This is reflected through investors’ confidence in the stock.
The company’s earnings outperformed the Zacks Consensus Estimate in the last quarter by 9.1%. Moreover, this Zacks Rank #3 (Hold) stock has a market cap of $841.87 million and an impressive long-term expected earnings growth rate of 35%.
Key Growth Catalysts
Share price of Adeptus Health has been going up ever since the company reported stellar first quarter results on Apr 23. In the last reported quarter, the company’s earnings and sales managed to surpass the respective Zacks Consensus Estimates. Notably, the company generated total revenue of $81.5 million, which grew more than 100% on a year-over-year basis.
Patient services continue to be a key growth catalyst for the company. Net revenue from the segment jumped more than 100% from the year-ago quarter and contributed significantly to the upside in total revenue.
The expansion of freestanding facilities and the opening of the Dignity Health Arizona General Hospital contributed to the impressive first quarter results. Buoyed by the solid quarterly results, management also raised its guidance for full year 2015.
Additionally, Adeptus Health recently inked a strategic partnership with University of Colorado Health (UC Health) to improve the quality of emergency medical care in Colorado. Medical Properties Trust (MPW) is also slated to hand over $250 million to Adeptus Health to support the latter’s growth.
Zacks projected good earnings growth rate for Adeptus Health in both 2015 and 2016.
Stocks to Consider
Currently, Adeptus Health has a Zacks Rank #3 (Hold). Better-ranked medical stocks at the current moment include AMN Healthcare Services AHS, Cancer Genetics CGIX and INC Research Holdings INCR. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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