GICS Sector : Healthcare
Addus HomeCare Corporation, together with its subsidiaries, provides personal care services to elderly, chronically ill, disabled persons, and individuals who are at risk of hospitalization or institutionalization in the United States.It operates through three segments: Personal Care, Hospice, and Home Health.The Personal Care segment provides non-medical assistance with activities of daily living.
Addus HomeCare Corporation reported a robust third quarter of 2025, with total revenue reaching $362.3 million, a 25% increase from $289.8 million in the third quarter of 2024. The revenue growth translated into adjusted earnings per share of $1.56, a 20% increase from $1.30 in the third quarter of 2024, beating analyst estimates of $1.53. Adjusted EBITDA was $45.1 million, a 31.6% increase from $34.3 million in the third quarter of 2024. The company's strong financial performance was also reflected in its operating cash flow, which exceeded $50 million for the quarter.
Publication Date: Nov -30
The personal care segment saw same-store revenue growth of 6.6% and same-store hours increase by 2.4% compared to the third quarter of 2024. The hospice segment reported same-store revenue growth of 19% and an increase in average daily census of 9.5% compared to the third quarter of 2024. The home health segment saw a 2.8% decrease in same-store revenue compared to the third quarter of 2024, but admissions have leveled out year-over-year.
The company continues to evaluate acquisition opportunities to enhance its geographic coverage and density. Recent acquisitions include the purchase of Del Cielo Home Care Services in South Texas and Helping Hands Home Care Services in Western Pennsylvania. The caregiver app rollout in Illinois has shown a significant benefit, with an uptick in fill rate, and the company is optimistic about the opportunity in New Mexico and Texas.
The company expects mid-to-upper single-digit revenue growth in hospice and is cautiously optimistic about opportunities in home health. With a current P/E Ratio of 25.77 and an EV/EBITDA of 15.48, the market appears to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 7.1%, which is slightly higher than the company's historical growth rate. The company's strong financial performance and strategic initiatives position it well for continued growth.
The company expects a 3.1% increase in hospice rates effective October 1, 2025, and a 9.9% rate increase in Texas effective September 1, 2025. However, the proposed home health rule projects a 6.4% aggregate reduction in Medicare payments in 2026, which could impact the company's home health segment.
The company has made strategic investments in its team, driving strong results in hospice. The labor market for clinical staff is stable, except in a few urban markets. If reimbursement rates improve, the company believes it can attract necessary staff to return to organic growth.
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Growing demand for non-medical in-home care services, increasing elderly population, and rising need for assistance with daily living activities drive the growth of Personal Care segment.
Growing demand for hospice care driven by aging population, increasing prevalence of chronic diseases, and shift towards value-based care. Addus HomeCare's compassionate care and focus on comfort and quality of life position it for growth in this segment.
Growing demand for home-based care, increasing elderly population, and government initiatives to promote home healthcare are driving the growth of Addus HomeCare Corporation's Home Health segment.
Assistance with daily living activities such as bathing, dressing, grooming, and feeding
Skilled medical care provided in the comfort of the patient's own home
Social and recreational activities for adults who require supervision and care during the day
Compassionate care and support for individuals with terminal illnesses
One-on-one medical care and support for individuals with complex medical needs
Addus HomeCare Corporation's services are highly specialized and require skilled professionals, making it difficult for substitutes to emerge.
While customers have some bargaining power due to the availability of alternative home care providers, Addus HomeCare Corporation's strong reputation and quality of care limit the impact of customer bargaining power.
Addus HomeCare Corporation has a diverse supplier base, and the company's scale and reputation give it bargaining power over suppliers.
While there are barriers to entry in the home care industry, such as licensing and regulatory requirements, new entrants can still emerge, particularly in niche markets or with innovative business models.
The home care industry is highly competitive, with many established players and a growing demand for services, leading to intense rivalry among providers.
| Value | |
|---|---|
| Debt Weight | 16.09% |
| Debt Cost | 8.25% |
| Equity Weight | 83.91% |
| Equity Cost | 8.74% |
| WACC | 8.66% |
| Leverage | 19.17% |
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