What happened
Shares of AdaptHealth (AHCO -0.31%) were crashing 26.2% lower as of 11:37 a.m. ET on Tuesday. The steep decline came after the home medical equipment, supplies, and services provider announced its 2022 fourth-quarter and full-year results after the market closed on Monday.
AdaptHealth reported fourth-quarter revenue of $780.3 million, up 11.1% year over year. The company posted a net loss in the fourth quarter of $2.6 million, or $0.02 per diluted share. This reflected significant deterioration from the positive earnings of $22.9 million, or $0.15 per diluted share, in the prior-year period. It also was much worse than the consensus estimate of Q4 earnings of $0.28 per share.
In addition, AdaptHealth provided full-year 2023 guidance. The company expects net revenue of between $3.16 billion and $3.24 billion. This range is lower than the previous outlook of revenue between $3.21 billion and $3.29 billion. AdaptHealth looks for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $650 million and $710 million, down from its previous guidance range of $690 million to $750 million.
So what
AdaptHealth CEO Steve Griggs stated that the company "is entering 2023 from a position of strength." But today's sell-off indicates that investors don't have the same level of confidence that he has.
The company's Q4 earnings miss isn't the biggest concern in its latest update. Investors focus more on the future. And AdaptHealth's future prospects are weaker than expected based on its revised full-year 2023 guidance.
Now what
AdaptHealth's goal is to achieve $4 billion in annual revenue, $1 billion in adjusted EBITDA, and $300 million in free cash flow by 2025. Those objectives still appear to be attainable despite the company's disappointing Q4 update.
