William Blair & Company initiated research coverage of Addus HomeCare Corporation(ADUS $81.46), one of the largest providers of personal care services in the United States, with a growing network of hospice and home health agencies.
Analyst Matt Larew estimated the company would generate revenue of $617 million in 2019 and $690 million in 2020 with earnings per share of $2.33 and $2.93, respectively.
Larew said, “We believe Addus’s exposure to sustainable, accelerating demographic trends that drive its core personal care and fledgling hospice and home health businesses should support organic growth at least at the high end of the company’s stated 3%-5% target for the next decade-plus. In addition, Addus’s role as an in-home care partner of choice for managed care in the Medicaid population should position the company to take outsized share as Medicare Advantage plans more aggressively integrate nonskilled in-home care services into their benefit packages.
“Addus will be well positioned to use its strong balance sheet to supplement organic growth by continuing to consolidate the fragmented personal care industry, in our view. Furthermore, with its integration of Ambercare complete, Addus has a platform to broaden its in-home care services into the skilled arena, as the company builds hospice and home health capabilities onto its existing personal care footprint to transform into an integrated in-home healthcare delivery provider. In sum, Addus is one of the few ways for public market investors to play the in-home healthcare delivery theme, with a particular emphasis on preventive care.”
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