Shares of medical equipment maker AdaptHealth (AHCO 1.24%) climbed 30% on Tuesday. The company, which serves approximately 3.8 million patients annually through its 750 locations in 47 states, released its first-quarter report after the market closed on Monday.
Three factors in the release pushed the stock higher: AdaptHealth posted a profit compared with a loss in the same quarter a year ago, it issued upgraded guidance for 2022, and it announced that it was planning $200 million of stock buybacks.
The healthcare company reported first-quarter revenue of $706.2 million, up 46.5% year over year. It also said it had net income of $41.8 million, or $0.08 earnings per share (EPS), compared with a loss of $4 million and EPS loss of $0.08 in the same period in 2021. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) were $137.6 million, compared with $104.2 million in the first quarter of 2021.
AdaptHealth also increased its guidance for revenue and adjusted EBITDA for the year. It raised its annual revenue forecast from about $2.83 billion to $3.03 billion to the range of $2.84 billion to $3.04 billion. It also said it expected adjusted EBITDA to fall between $615 million and $675 million, while previous forecasts had said it would be between $610 million and $670 million.
The medical equipment company seems to be climbing out of its pandemic doldrums. AdaptHealth sells and rents medical equipment such as hospital beds, diabetes management systems, and continuous positive airway pressure (CPAP) machines. Its business seems to bouncing back due to more medical referrals, particularly with its line of home medical equipment. It also helps that the company's supply issues regarding CPAP machines have lessened, according to the CEO Steve Griggs.
With a price-to-earnings valuation of 10.18, the stock seems to be a good buy, particularly as it seems to be on the rebound. In the short term, the stock is likely to retreat a bit, but the company's report shows it may be a good long-term buy.