Bank of America Securities analyst Joanna Gajuk maintained a Buy rating on Addus Homecare (ADUS – Research Report) today and set a price target of $118.00.
Joanna Gajuk’s rating is based on a comprehensive evaluation of Addus Homecare’s growth prospects and strategic initiatives. She believes that the company is well-positioned to expand due to the impending changes to the Medicaid Access Rule, which may favor larger providers like Addus by enabling them to gain market share. Additionally, the company’s Personal Care Services segment is performing robustly, with expectations to increase revenues between 3-5% in 2024. The anticipated growth is further supported by stable margins exceeding 11%, and a long-term outlook that suggests pricing and volume increases will sustainably drive organic growth within this range.
Moreover, Addus has successfully implemented new applications and tools that have significantly improved their recruitment and retention strategies, leading to a noticeable uptick in hiring and an improved turnover rate that is better than the industry average. These enhancements in workforce management are crucial for maintaining service quality and operational efficiency. Furthermore, Gajuk recognizes the potential in the company’s nascent Value Based Care (VBC) initiatives, which, though currently small, present opportunities for expansion with new payors, including Medicare Advantage. The progressive growth in hospice admissions is also seen as a positive indicator for future census expansion, reaffirming Gajuk’s confidence in Addus Homecare’s overall strategy and justifying the Buy rating.
Gajuk covers the Healthcare sector, focusing on stocks such as Addus Homecare, Chemed, and Brookdale Senior Living. According to TipRanks, Gajuk has an average return of 1.3% and a 63.83% success rate on recommended stocks.
In another report released on May 9, TD Cowen also maintained a Buy rating on the stock with a $119.00 price target.
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Addus Homecare (ADUS) Company Description:
Addus HomeCare Corp. engages in the provision of in-home personal care services. It operates through the following segments: Personal Care, Hospice, and Home Health. The Personal Care segment provides non-medical assistance with activities of daily living, primarily to persons who are at risk of hospitalization or institutionalization, such as the elderly, chronically ill or disabled. The Hospice segment includes physical, emotional, and spiritual care for people who are terminally ill as well as for their families. The Home Health segment offers services that are primarily medical in nature to individuals who may require assistance during an illness or after surgery, and include skilled nursing and physical, occupational and speech therapy. The company was founded on July 27, 2006 and is headquartered in Frisco, TX.
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