12 Most Oversold Healthcare Stocks to Buy Now

11. Acadia Healthcare Company, Inc. (NASDAQ:ACHC)

Year Perf: -49.70%

Analyst Upside: 56.48%

Number of Hedge Fund Holders: 43

Acadia Healthcare Company, Inc. (NASDAQ:ACHC) provides behavioral healthcare services across the US in various settings, including inpatient psychiatric hospitals, residential treatment centers, specialty treatment facilities, and outpatient clinics.

The company reported strong fiscal Q3 2024 results, with a total revenue of $816 million, reflecting growth of 8.7% over fiscal Q3 2023. This growth was attributed to patient day growth and rate improvement. Same facility revenue also grew by 8.6% compared to the same quarter last year, including patient day growth of 4.7% and an increase in revenue per patient day of 3.6%. In addition, Acadia Healthcare Company, Inc. (NASDAQ:ACHC) reported a 10.5% increase in adjusted EBITDA for fiscal Q3 2024 compared to the same quarter in the previous year. In addition, adjusted EBITDA margin was 23.8% compared with 23.4% for the same quarter last year, an expansion of 40 basis points.

Apart from its solid financials, the company is progressing consistently across its bed growth targets. It is on track to complete the construction of around 1,200 beds this year, including nearly 700 beds in fiscal Q4 from several new joint ventures and wholly owned facilities. It is also on track to add over 400 beds to its existing facilities for the year, including over 300 expected in fiscal Q4 2024. The company ranks 11th on our list of the 12 most oversold healthcare stocks to buy now.

Aristotle Small Cap Equity Strategy stated the following regarding Acadia Healthcare Company, Inc. (NASDAQ:ACHC) in its Q4 2024 investor letter:

“Acadia Healthcare Company, Inc. (NASDAQ:ACHC), a behavioral healthcare and substance abuse treatment services company, continues to be impacted by the negative sentiment surrounding the news headlines related to patient care and questions about billing practices. While we take these developments seriously, we believe investors’ reaction to the news has been more severe than warranted. Industry peers have faced similar levels of scrutiny in the past with limited fundamental impact, and unless additional information is uncovered, we believe the current scrutiny will be resolved without much of an impact on their business. We continue to believe the company is well positioned to be an important part of the solution to an unfortunately growing need for behavioral health services.”