Why the latest earnings report matters for AdaptHealth

AdaptHealth (AHCO) recently reported quarterly revenue of US$820.3 million, which came in 2.5% above analyst estimates, with full year guidance aligned to market expectations despite slower growth compared with peers.

This mix of modest outperformance and steady guidance has drawn fresh attention to the stock as investors weigh how a slower growing home medical equipment provider fits into a sector facing labor cost and reimbursement pressures.

Since the earnings release, AdaptHealth’s 90 day share price return of 20.57% and year to date share price return of 8.48% suggest momentum has picked up. However, the 3 year total shareholder return of 51.70% and 5 year total shareholder return of 71.82% point to a much tougher longer term experience for investors.

If this earnings update has you thinking about other healthcare names, it could be a good moment to scan healthcare stocks and see what else fits your watchlist.

With AdaptHealth trading at US$10.49 and indicators like analyst targets and intrinsic value estimates suggesting a potential discount, you have to ask yourself: is this a genuine opportunity, or is the market already pricing in future growth?

Most Popular Narrative: 20.1% Undervalued

Compared with the last close at US$10.49, the most followed narrative points to a higher fair value anchored in recurring revenue and efficiency gains.

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 is expected to drive significant topline revenue expansion beginning in 2026 and help stabilize net earnings through a higher mix of recurring and non-cyclical revenue.

Want to see what sits behind that contract math and the projected earnings ramp? The narrative leans heavily on margin uplift and compounding revenue assumptions.

Result: Fair Value of $13.13 (UNDERVALUED)

However, the story could change quickly if CMS cuts reimbursement rates or if the big capitated contract requires heavier upfront spending than expected.

Build Your Own AdaptHealth Narrative

If you do not share that view, or if you prefer to test the numbers yourself, you can build a personalized thesis in minutes with Do it your way.

A great starting point for your AdaptHealth research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If AdaptHealth is on your radar, do not stop there. This is a good moment to widen your search and line up a few more quality watchlist candidates.

• Spot potential value setups by scanning these 882 undervalued stocks based on cash flows that might fit the kind of price versus fundamentals profile you are hunting for.
• Explore technology-focused opportunities by checking out these 28 AI penny stocks, where businesses are using artificial intelligence at the core of their growth plans.
• Review potential income ideas by looking at these 12 dividend stocks with yields > 3%, which could help you build a steadier cash return stream alongside your growth names.

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.