Acadia Healthcare Company, Inc. (NASDAQ:ACHC) stock tumbled Wednesday after slashing its 2025 outlook, warning of sharply higher litigation-related costs that will hit earnings.
On Tuesday, the company revised its outlook after completing its annual third-party actuarial review of professional and general liability (PLGL) costs.
The company said the updated reserves reflect higher anticipated expenses tied mainly to patient-related litigation.
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Consequently, Acadia Healthcare lowered its 2025 outlook, cutting adjusted EBITDA to $601 million–$611 million (from $650 million-$660 million earlier) and adjusted EPS to $1.94–$2.04 from $2.35–$2.45 prior.
The guidance reflects higher professional and general liability (PLGL) costs. The company expects 2025 PLGL expenses to jump to roughly $116 million, compared with $54 million in 2024.
Also, Acadia Healthcare now projects its net PLGL liability to increase to $145 million–$165 million from $78 million as of December 31, 2024.
Acadia also anticipates PLGL costs of $100 million–$110 million in 2026, citing a 168% surge in claim frequency and higher incurred-but-not-reported (IBNR) reserves.
Recent Earnings
Last month, Acadia Healthcare reported third-quarter adjusted EPS of 72 cents, beating expectations of 67 cents, while revenue came in at $851.573 million, above the $845.733 million estimate.
However, the company cut its full-year 2025 guidance, lowering adjusted EPS to $2.35–$2.45 from the prior $2.45–$2.65 range, versus the consensus of $2.48.
Acadia had also reduced its 2025 revenue outlook to $3.280 billion–$3.300 billion from $3.300 billion–$3.350 billion, versus the street view of $3.315 billion.
ACHC Price Action: Acadia Healthcare Co. shares were down 26.50% at $12.11 during premarket trading on Wednesday, according to Benzinga Pro data.
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