What Is Going On With Adeptus Health Inc (NYSE:ADPT)?

Adeptus Health Inc (NYSE:ADPT)

Medical Properties Trust, Inc. (NYSE:MPW), tenant and emergency room operator, Adeptus Health Inc (NYSE:ADPT), warned of considerable doubt about its ability to work as a going concern. Mentioning a meeting with MPW CFO Mr. Steven Hammer, Karin Ford of Mitsubishi said that Adeptus is current late on rent since last month, and MPW has letter of credit for 4 months’ rent and can succeed in finding a replacement operator.

The buzz

Earlier in the month, Adeptus Health Inc (NYSE:ADPT) declined over 60% on heavy trading volume after the firm posted a weaker-than-anticipated report for Q3 2016. Adjusted earnings came at 6 cents per share compared to the FactSet consensus projection of 54 cents per share. Revenue for the quarter came at $85.4 million compared to Wall Street’s projections of $90 million.

The firm lowered its estimate for full-year EBITDA to a range of $70 million to $80 million versus its prior expectation of $110 million to $115 million. Street analysts surveyed by FactSet anticipate EBITDA of $88 million for 2016. Thomas Hall, the CEO, reported that the results were dismal following weaker than anticipated volumes in non-hospital casualty department segments, collection issues linked with third party billing agent and increased expenses associated with the starting of three hospitals in 2H2017.

Bank of America and Merrill Lynch downgraded Adeptus Health Inc (NYSE:ADPT) stock to “underperform” from previous recommendation of “buy.” The firm reduced its price target to $17 from the previous target of $60, showing a lack of visibility. Adeptus’ issues won’t be solved quickly.

Jefferies also lowered its rating on the stock to “hold” from “buy” and lowered its price target to $13 from previous given target of $77. The firm reported that it is concerned about company’s cash flows and balance sheet.

Additionally, Stephens reduced its rating to “equal weight” from “overweight” and dropped its price target $19 from previously given target of $63, noting that the firm must “right itself.” However, this won’t occur within the imminent quarters, the firm projects.

TheStreet Ratings rated this stock as per “risk-adjusted” total return outlook over a one-year investment horizon. Not depending on the news in any particular day, the rating may vary from Jim Cramer’s view. TheStreet Ratings released a rating of “hold” with a score of C-.

Adeptus Health Inc (NYSE:ADPT) strengths can be noted in multiple areas, like as its revenue growth, mainly robust financial position with rational debt levels by most attempts and notable return on stock.

Ticker Symbol ADPT
Last Price a/o 3:21 PM EST  $1.76
Average Volume 1.36M
Market Cap (mlns) $37.19M
Shares Outstanding (mlns) 21.13M
Share Float (mlns) 8.82M
Inside Ownership 1.50%
Short Float 71.33%
Short Interest Ratio 4.64
Quarterly Return -79.07%
YTD Return -76.96%
Year Return -96.89%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.