Please ensure Javascript is enabled for purposes of website accessibility

Why AdaptHealth Dived by Nearly 12% Today

By Eric Volkman – May 6, 2021 at 4:42PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

That's what can happen when you post big earnings misses.

What happened

AdaptHealth (AHCO -1.90%), a company specializing in home medical equipment (HME), was not a healthy stock on Thursday. It cratered by 11.8% following the release of its first-quarter results.

So what

For the quarter, thanks in no small part to recent acquisitions, AdaptHealth booked just over $482 million in revenue, well up from the $191 million of Q1 2020. Meanwhile, the healthcare company's net loss narrowed to $4 million ($0.08 per share) from the year-ago shortfall of $34.6 million ($0.82 per share).

Stethoscope atop US currency and insurance claim form.

Image source: Getty Images.

While those improvements look encouraging on the surface, analysts were expecting better. On average, they were modeling over $486 million on the top line, and a net income well in the black of $0.23 per share.

In its earnings release, AdaptHealth pledged to explore ways of increasing sales and trimming expenses. "We are continuing to integrate and optimize technology across our organization to improve efficiencies, enhance sales, and increase customer satisfaction," President Josh Parnes said. He specifically mentioned the company's e-prescribe platform and other efficiency-boosting tech solutions.

Now what

It's admirable that AdaptHealth aims to make improvements where it counts, since vast swaths of the U.S. medical industry could use significant upgrades, not only the HME segment.

But those Q1 misses were wide, indicating a business that continued to struggle in a quarter when it probably should have thrived -- the coronavirus pandemic has locked many patients at home, after all, and the U.S. population as a whole is aging.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AdaptHealth Corp. Stock Quote
AdaptHealth Corp.
AHCO
$19.11 (-1.90%) $0.37

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
107%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.