Core Insights - Acadia Healthcare Company, Inc. (ACHC) has warned investors about rising liability costs, leading to a significant reduction in its 2025 guidance for adjusted EBITDA and EPS [1][6] Liability Costs and Financial Guidance - Acadia's 2025 professional and general liability (PLGL) expense is now expected to be approximately $116 million, more than double the $54 million projected for 2024 [3][6] - The adjusted EBITDA for 2025 is now forecasted to be between $601 million and $611 million, with adjusted earnings per share expected to range from $1.94 to $2.04, a decline from $3.30 in 2024 [3][4] - The company has experienced five downward estimate revisions in the past month, with no upward revisions, indicating a lack of investor confidence [4][5] Claims and Settlement Trends - The increase in liability costs is primarily driven by a 168% spike in claim frequency for the 2025 policy year, along with higher settlement expectations and less favorable reinsurance protection [2][3][6] - The anticipated PLGL costs for 2026 are expected to remain elevated at $100 million to $110 million [3] Market Position and Valuation - Acadia's stock is currently trading at a forward P/E of 7.33X, significantly lower than its five-year median of 20.55X and the industry average of 11.69X, indicating a steep discount [10] - The stock holds a Zacks Rank 5 (Strong Sell), reflecting negative market sentiment [12] Industry Comparison - In contrast, 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 [8][9] - Tenet Healthcare is benefiting from growing patient revenue and strategic acquisitions, while HCA Healthcare is leveraging increased admissions and a broad healthcare services network [9]