AdaptHealth slides as Bank of America downgrades on Q1 miss
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- AdaptHealth (NASDAQ:AHCO) trended lower on Tuesday as Bank of America downgraded its shares after the at-home medical- equipment company reported lower-than-expected Q1 results with changes to the top management.
- BofA analysts point out that AHCO’s Q1 print, which marked the latest in a string of recent earnings misses for the company, also coincided with the resignation of its chief executive Stephen Griggs.
- Downgrading the stock to Neutral from Buy, BofA analysts also note that AdaptHealth’s (AHCO) adj. EBITDA for Q1 stood at $10M or 7% below Street forecasts due to poor revenue and margins.
- “We downgrade to Neutral as the string of disappointing results makes it now a show me story as the fastest growing business decelerated significantly,” the team added, lowering their price target to $12 from $21 per share.
- Reasoning for the Neutral rating, BofA points to the attractiveness of AHCO's 5% organic growth and potential upside from the company's new value-based contract.