Acadia Healthcare(US:ACHC) ZACKS·2025-09-25 14:31Core Insights - Acadia Healthcare Company, Inc. (ACHC) shares increased by 11.7% following Engine Capital's announcement of a 3% stake and a call for significant changes within the company [1][6] - Engine Capital believes Acadia is undervalued due to strong cash generation and real estate, which have been overshadowed by poor execution and management issues [2][3] - ACHC's current forward P/E ratio is 8.87X, significantly lower than its five-year median of 20.55X and the industry average of 13.55X, indicating potential for operational improvements to unlock value [3][4] Company Performance - ACHC's stock has declined by 67.5% over the past year, compared to a 5.8% decline in the industry, exacerbated by a Department of Justice investigation into alleged misconduct [4][6] - The Zacks Consensus Estimate for ACHC's 2025 earnings is $2.54 per share, reflecting a 23% decrease year-over-year [11] Proposed Changes by Engine Capital - Engine Capital is advocating for a board refresh with directors experienced in behavioral health and capital allocation, realigning executive compensation, and pausing aggressive expansion [7] - The proposal includes streamlining operations, reinstating a regional leadership model, and monetizing select assets to fund buybacks, aimed at restoring investor trust and closing the valuation gap [7] Industry Context - Competitors like Tenet Healthcare Corporation (THC) and HCA Healthcare, Inc. (HCA) are experiencing growth due to rising demand from an aging population and increased disease cases [9][10] - THC is benefiting from higher patient revenue and strategic divestitures, while HCA is leveraging increased admissions and a broad healthcare services network [10]