AdaptHealth (AHCO) is back in focus after securing a five year exclusive contract to supply home medical equipment and supplies for a large national healthcare system serving over 10 million members.

The latest contract news lands after a mixed share price run, with a 7.23% 90 day share price return and a 4.34% year to date share price return, yet a 2.32% decline in 1 year total shareholder return and a 52.38% decline in 3 year total shareholder return, suggesting longer term holders have faced sustained pressure even as shorter term momentum has started to firm.

If this kind of contract win has you thinking about broader healthcare trends, it could be a good moment to scan other opportunities across healthcare stocks.

With AdaptHealth trading at $10.09 and sitting at what is described as roughly a 62% intrinsic discount and a 33% discount to analyst targets, you have to ask: is there real upside here, or is the market already pricing in future growth?

Most Popular Narrative: 23.1% Undervalued

AdaptHealth's most followed narrative places fair value at $13.13, above the recent $10.09 share price, setting up a case built around contracts, efficiency and recurring revenue.

The newly signed five-year, $1+ billion exclusive capitated contract with a major national health system substantially increases AdaptHealth's long-term base of recurring revenue, enabling predictable growth as US healthcare continues to shift toward home-based delivery and value-focused payer arrangements. This will drive significant topline revenue expansion beginning in 2026 and help stabilize net earnings through a higher mix of recurring/non-cyclical revenue.

Curious how a single contract, projected revenue build and margin shift come together to justify that gap to $13.13? The narrative leans heavily on recurring cash flows, profit expansion and a specific earnings multiple a few years out. If you want to see how those moving parts stack up over time, the full story lays out each step.

Result: Fair Value of $13.13 (UNDERVALUED)

However, the story could change quickly if new CMS competitive bidding rules hit reimbursement harder than expected or if the big capitated contract proves costly to execute.

Build Your Own AdaptHealth Narrative

If you look at the numbers and come to a different conclusion, or simply prefer to test your own assumptions, you can build a custom narrative in minutes with Do it your way.

A great starting point for your AdaptHealth research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.