Core Insights - Addus HomeCare (ADUS) reported quarterly earnings of $1.42 per share, exceeding the Zacks Consensus Estimate of $1.33 per share, and up from $1.21 per share a year ago [1][2] - The company posted revenues of $337.71 million for the quarter, which was below the Zacks Consensus Estimate by 0.68%, but an increase from $280.75 million year-over-year [3] - Addus HomeCare has surpassed consensus EPS estimates three times in the last four quarters, while revenue estimates have also been exceeded three times [2][3] Earnings Performance - The earnings surprise for the recent quarter was 6.77%, while the previous quarter's earnings matched expectations with no surprise [2] - The stock has underperformed the market, losing approximately 16.2% year-to-date compared to the S&P 500's decline of 3.3% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.49, with expected revenues of $348.17 million, and for the current fiscal year, the EPS estimate is $6.03 on revenues of $1.4 billion [8] - The estimate revisions trend for Addus HomeCare is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [7] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which Addus HomeCare belongs, is currently ranked in the top 20% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Financial Performance - Net service revenues for Q1 2025 were $337.7 million, a 20.3% increase from $280.7 million in Q1 2024[4] - Net income for Q1 2025 was $21.2 million, or $1.16 per diluted share, compared to $15.8 million, or $0.97 per diluted share in Q1 2024[4] - Adjusted EBITDA increased 25.1% to $40.6 million in Q1 2025 from $32.4 million in Q1 2024[4] - Total revenue for the three months ended March 31, 2025, was $337.7 million, a 20.3% increase from $280.7 million in the same period of 2024[22] - Adjusted EBITDA for the three months ended March 31, 2025, was $40.6 million, up from $32.4 million, marking a 25.2% increase[27] - Adjusted net income increased to $26.0 million, compared to $19.8 million in the same period last year, a growth of 31.4%[27] Segment Performance - The personal care segment, accounting for 76.5% of total revenue, saw a 7.4% organic revenue increase year-over-year[5] - Personal Care segment revenue increased to $258.3 million from $208.0 million, representing a 24.2% growth year-over-year[22] - The hospice care segment, which made up 18.2% of total revenue, experienced a 9.9% organic revenue growth compared to the previous year[6] - Hospice segment revenue rose to $61.4 million, up 9.3% from $55.9 million in the prior year[22] - Organic revenue growth for the Personal Care segment was 7.4%, down from 9.3% in the previous year[24] Operational Metrics - Cash flow from operations for Q1 2025 was $18.9 million, including $2.5 million in ARPA funds utilization[8] - Average billable census total increased to 50,478, compared to 37,715 in the previous year, reflecting a significant growth due to acquisitions[24] - Revenue per billable hour decreased to $25.32 from $27.35, indicating a 7.4% decline[24] - Medicare accounted for 69.9% of Home Health revenues, slightly up from 69.1% in the previous year[24] Assets and Liquidity - Cash and liquidity as of March 31, 2025, included $97.0 million in cash and $203.0 million in bank debt, with $632.9 million available under the revolving credit facility[8] - Total assets increased to $1.407 billion as of March 31, 2025, compared to $1.014 billion in the previous year[20] Strategic Initiatives - The company aims to pursue additional acquisition opportunities in 2025 to expand its market coverage and service offerings[9] - Addus HomeCare currently serves approximately 62,000 consumers across 260 locations in 23 states[15] - The company served 23 states and expanded locations to 199, up from 153 in the prior year[24]

Company Overview - Addus HomeCare (ADUS) shares increased by 4.9% to close at $101, supported by higher trading volume compared to normal sessions [1] - The stock has gained 1.7% over the past four weeks [1] Financial Performance - Addus HomeCare is expected to report quarterly earnings of $1.33 per share, reflecting a year-over-year increase of 9.9% [2] - Projected revenues for the upcoming report are $339.94 million, which is a 21.1% increase from the same quarter last year [2] Market Trends - The recent stock price increase is linked to a relief rally in global markets due to a 90-day pause on tariff hikes announced by the United States [1] - The consensus EPS estimate for Addus HomeCare has remained unchanged over the last 30 days, indicating stability in earnings expectations [4] Industry Context - Addus HomeCare operates within the Zacks Medical - Outpatient and Home Healthcare industry, where another company, LifeStance Health Group (LFST), saw a 5.8% increase in its stock price [4] - LifeStance Health's consensus EPS estimate has decreased by 11.1% over the past month, but it still represents a 50% improvement from the previous year [5]

Core Viewpoint - Addus HomeCare (ADUS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system tracks the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years, highlighting the importance of earnings revisions in stock price movements [1][4]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, with institutional investors using these estimates to determine fair value [4][6]. Company Performance Indicators - Addus HomeCare is projected to earn $6.04 per share for the fiscal year ending December 2025, representing a year-over-year increase of 14.8% [8]. - Over the past three months, the Zacks Consensus Estimate for Addus HomeCare has increased by 5.2%, indicating a positive trend in earnings expectations [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Addus HomeCare to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental ...

Group 1 - Investors in Addus HomeCare Corporation (ADUS) should monitor the stock due to significant activity in the options market, particularly the Apr 17, 2025 $60.00 Put which has high implied volatility [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Addus HomeCare's stock price, potentially due to an upcoming event [2] - Addus HomeCare currently holds a Zacks Rank 2 (Buy) in the Medical - Outpatient and Home Healthcare industry, which is in the top 21% of the Zacks Industry Rank [3] Group 2 - Over the past 60 days, no analysts have raised their earnings estimates for the current quarter, while one analyst has lowered the estimate, resulting in a decrease in the Zacks Consensus Estimate from $1.35 to $1.34 per share [3] - The high implied volatility may indicate a trading opportunity, as options traders often seek to sell premium on options with high implied volatility, hoping the stock does not move as much as expected by expiration [4]

Financial Performance - For the year ended December 31, 2024, total net service revenue increased to $1,154,599,000 from $1,058,651,000 in 2023, representing a growth of approximately 9.1%[22] - Net income for 2024 was $73,598,000, compared to $62,516,000 in 2023, marking a year-over-year increase of approximately 17.5%[22] - Adjusted EBITDA for 2024 was $140,290,000, up 15.9% from $121,020,000 in 2023[214] - Total assets increased to $1,412,634,000 in 2024, up from $1,024,426,000 in 2023, reflecting a growth of 37.9%[214] Revenue Sources - For the year ended December 31, 2024, approximately 61.8% of net service revenues were derived from state and local governmental agencies, primarily through Medicaid state programs, and 22.2% from Medicare[136] - The personal care segment generated $856,581,000 in revenue for 2024, up from $794,718,000 in 2023, reflecting an increase of about 7.8%[22] - Managed care revenues accounted for 34.8% of total revenue in 2024, compared to 36.0% in 2022[212] - The company derived approximately 21.0% and 20.9% of its revenue from the Illinois Department on Aging programs for the years ended December 31, 2024 and 2023, respectively[125] Workforce and Employee Engagement - As of December 31, 2024, the total workforce consists of 49,703 employees, including 5,548 full-time caregivers and 43,517 part-time caregivers[69] - Approximately 34.8% of total employees, or 17,283 individuals, are represented by labor unions, with strong relationships maintained through collective bargaining agreements[71] - The annual employee engagement survey indicated an 80% satisfaction rating for work-life balance among employees[70] - Addus has implemented various employee development programs, including Ignite and Emerge, aimed at leadership development and skill enhancement[74] Growth Strategy and Market Position - The company plans to continue driving organic growth through enhanced sales and marketing capabilities, technology investments, and recruiting efforts[31] - The company is strategically expanding its service offerings to include hospice and home health, increasing its value to managed care partners[32] - The company is well-positioned to capitalize on industry consolidation trends, leveraging its reputation and strong payor relationships[25] - The company expects to derive a significant portion of its revenues from Texas going forward as a result of the Gentiva Acquisition[124] Regulatory Environment - The personal care services industry is subject to increasing regulation, which may impact operational requirements and market entry for new providers[26] - The company is subject to extensive federal and state regulations, which may impact service offerings and operational costs[85] - The federal government and many states are implementing strategies to reduce Medicaid expenditures, impacting reimbursement rates and coverage[58] - The company is required to offer a minimum level of health coverage for 95% of full-time employees in 2024 or face annual penalties[165] Challenges and Risks - Economic conditions in the U.S. have led to increased competition for caregivers and skilled healthcare staff, impacting the company's ability to attract and retain employees[117] - Labor costs represent the most significant component of the company's total expenditures, and increases in labor costs could significantly harm its business[129] - The company faces a highly competitive environment with various service providers, which may limit its ability to attract referrals and increase market share[151] - The company may face challenges in pursuing acquisitions or expanding into new regions without obtaining additional capital or lender consent[115] Technology and Cybersecurity - The company utilizes the Qlik Business Intelligence platform for operational performance analysis, integrating personal care and hospice segments to measure performance against budget[83] - Cybersecurity threats are increasing, with the company regularly targeted by attempted attacks, which could lead to data breaches and operational disruptions[185] - The company has invested in security measures and protocols to protect sensitive information, but risks remain due to third-party service providers[184] - The company relies on external service providers for critical information systems, increasing vulnerability to operational disruptions[176] Future Outlook - The company plans for significant growth through service expansion in existing markets and potential entry into new markets, which may require additional qualified personnel and resources[111] - The demand for home care services is expected to grow due to the aging U.S. population and a preference for home-based care over institutional settings[24] - The transition to managed care plans for Medicaid enrollees may increase competition for contracts and could negatively affect revenue growth rates and cash flow[149] - The company anticipates an increase in legal challenges to healthcare regulations following recent U.S. Supreme Court decisions[165]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $297.1 million, an increase of 7.5% compared to $276.4 million in Q4 2023 [20] - Adjusted earnings per share for Q4 2024 was $1.38, up 4.6% from $1.32 in Q4 2023 [20] - Adjusted EBITDA for Q4 2024 was $37.8 million, a 10.3% increase from $34.3 million in Q4 2023 [20] - For the full year 2024, total revenue was $1.2 billion, a 9.1% increase from $1.1 billion in 2023 [21] - Adjusted EBITDA for 2024 was $140.3 million, up 15.9% from $121 million in 2023 [21] Business Line Data and Key Metrics Changes - Personal care revenues for Q4 2024 were $216.9 million, accounting for 73.8% of total revenue [52] - Hospice care revenues were $59 million, representing 20.1% of total revenue [52] - Home health revenues were $17.8 million, making up 6.1% of total revenue [52] - Same store revenue growth for personal care was 5.8% in Q4 2024 compared to Q4 2023 [35] - Hospice same store revenue increased by 7.8% year-over-year [37] - Home health segment returned to positive growth with a 1.6% increase compared to Q4 2023 [39] Market Data and Key Metrics Changes - Illinois enacted a 5.5% rate increase for personal care services effective January 1, 2025, expected to contribute approximately $23 million in annualized revenue [34][47] - The company experienced solid caregiver hiring success, with personal care hiring at 76 hires per day, up from 74 hires per day in Q4 2023 [30] Company Strategy and Development Direction - The company is focused on expanding services related to home care, which is seen as valuable to both states and Congress [18] - The Gentiva acquisition is a significant part of the growth strategy, adding approximately $280 million in annualized revenues [50] - The company aims for a targeted minimum annual revenue growth of 10% despite the larger revenue base [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the potential impact of Medicaid program changes, believing that their services reduce overall costs to state Medicaid programs [16][19] - The company is well-positioned to handle potential changes in Medicaid funding due to its low-cost provider status [99] - Management anticipates continued growth in personal care services, aiming for a revenue increase of 3% to 5% in 2025 [72] Other Important Information - The company had cash on hand of approximately $100 million as of the end of 2024 [22] - A one-time write-off of approximately $4.9 million was taken in Q4 2024 related to excess corporate office space [29] - The company maintains a conservative leverage position at just under one times Adjusted EBITDA, allowing flexibility for strategic acquisitions [23] Q&A Session Summary Question: Average revenue per hour in Q4 and its impact - The average revenue per hour is expected to be slightly down due to the Gentiva deal and the lower reimbursement rate in Texas [67] Question: Organic volume growth in personal care - Organic volume growth in personal care was slightly up, with expectations to reach the higher end of the 3% to 5% growth range in 2025 [72][74] Question: Impact of work requirements on business - The majority of clients served are elderly and disabled, so work requirements would have negligible direct effects, potentially increasing caregiver availability [83] Question: Integration of Gentiva and its impact on cash flow - The integration of Gentiva is progressing smoothly, with no significant impact on cash flow conversion expected [119] Question: Expected margin decline from Q4 to Q1 - A 200 basis point margin decline is anticipated, primarily due to the mix shift from Gentiva and annual resets of payroll taxes [54][109]

Core Insights - Addus HomeCare (ADUS) reported revenue of $297.14 million for the quarter ended December 2024, reflecting a year-over-year increase of 7.5% and a surprise of +1.71% over the Zacks Consensus Estimate of $292.16 million [1] - The company's EPS for the quarter was $1.38, which is an increase from $1.32 in the same quarter last year, aligning with the consensus EPS estimate [1] Revenue Breakdown - Personal Care revenue reached $220.33 million, exceeding the average estimate of $203.82 million by two analysts, representing a year-over-year change of +7.7% [4] - Home Health revenue was reported at $17.83 million, slightly above the average estimate of $17.29 million, marking a +4.1% year-over-year increase [4] - Hospice revenue totaled $58.99 million, surpassing the estimated $58.01 million, with a year-over-year change of +7.8% [4] Stock Performance - Over the past month, Addus HomeCare shares have returned -16.4%, compared to a -0.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Core Insights - Addus HomeCare (ADUS) reported quarterly earnings of $1.38 per share, matching the Zacks Consensus Estimate and showing an increase from $1.32 per share a year ago [1] - The company achieved revenues of $297.14 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 1.71% and up from $276.35 million year-over-year [2] - Addus HomeCare has surpassed consensus EPS estimates three times over the last four quarters and topped revenue estimates four times in the same period [2] Earnings Performance - The company had a surprise of 0.78% in the previous quarter, with actual earnings of $1.30 per share against an expected $1.29 [1] - The current consensus EPS estimate for the upcoming quarter is $1.34, with projected revenues of $349.36 million, and for the current fiscal year, the estimate is $6 on $1.42 billion in revenues [7] Market Position - Addus HomeCare shares have underperformed the market, losing about 12.9% since the beginning of the year, while the S&P 500 has gained 2.2% [3] - The company currently holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the market in the near future [6] Industry Outlook - The Medical - Outpatient and Home Healthcare industry, to which Addus HomeCare belongs, is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]