ACHC Should I Buy
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Acadia Healthcare Company Inc (ACHC) is not a strong buy at this time for a beginner investor with a long-term focus. The stock faces significant operational headwinds, declining financial performance, and limited near-term catalysts for recovery. While there is some optimism from investor David Einhorn's recent purchase and a potential rebound, the overall sentiment and fundamentals suggest holding off on investment until clearer signs of sustained improvement emerge.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI of 83.121 signals the stock is overbought, suggesting a potential pullback. The stock is trading near its resistance level of R2: 16.255, which could act as a ceiling for further upward movement in the short term.
Investor David Einhorn's recent purchase of ACHC shares indicates confidence in a potential rebound. Additionally, the return of a former CEO is seen as a positive development by Einhorn.
Jefferies downgraded the stock to Hold, citing broad operational and macro headwinds. Analysts have consistently lowered price targets due to repeated guidance cuts and increased liability expenses. Hedge funds are selling, with a 194.77% increase in selling activity last quarter. Financial performance has been weak, with a 46.80% YoY drop in net income and a 45.95% YoY drop in EPS.
In Q3 2025, revenue increased by 4.41% YoY to $851.57M. However, net income dropped by 46.80% YoY to $36.25M, and EPS fell by 45.95% YoY to $0.4. Gross margin remained flat at 100%. The company faces significant profitability challenges.
Analysts have a mixed to negative sentiment on ACHC. Recent downgrades include Jefferies lowering the stock to Hold with a price target of $15, and BofA downgrading it to Underperform with a price target of $13. Other firms have also reduced price targets, citing liability expenses and limited near-term catalysts.
