Investment Thesis
ADUS demonstrates exceptional fundamental strength with robust revenue growth of 23.2% YoY coupled with accelerating net income growth of 30.3% YoY, indicating operational leverage and improved efficiency. The company maintains a fortress balance sheet with conservative 0.11x debt-to-equity, strong liquidity (1.80x current ratio), and generates substantial free cash flow of $103.8M, positioning it well for sustainable growth and shareholder returns.
ADUS Strengths
- Revenue growth of 23.2% YoY with net income acceleration of 30.3% YoY demonstrates operating leverage and margin expansion
- Fortress balance sheet with low debt-to-equity of 0.11x, strong interest coverage of 10.2x, and $81.6M cash position
- Excellent free cash flow generation of $103.8M (7.3% FCF margin) with minimal capital requirements ($7.7M CapEx)
- Healthy liquidity metrics with 1.80x current and quick ratios supporting operational flexibility
- 20 Form 4 insider filings in last 90 days suggest management confidence and active engagement
ADUS Risks
- Net margin of 6.7% is relatively thin for healthcare services, limiting room for operational disruptions
- Operating margin of 9.7% reflects competitive pressures common in home healthcare sector with wage inflation pressures
- ROE of 8.8% is modest, suggesting capital may not be deployed with maximum efficiency relative to cost of equity
- Gross margin of 32.5% leaves vulnerability to labor cost inflation and reimbursement rate pressures in home care
- Sector regulatory risks including Medicare/Medicaid reimbursement changes and compliance requirements not quantified
Key Metrics to Watch
- Operating margin trend - monitor for sustainability of leverage given wage inflation headwinds
- Free cash flow conversion and capital allocation decisions including debt reduction or reinvestment
- Revenue growth sustainability - track organic vs. acquisition-driven growth mix
- Gross margin stability amid labor cost inflation in home healthcare sector
- Debt-to-equity ratio movement and interest coverage maintenance during growth phase
ADUS Financial Metrics
ADUS Profitability Ratios
ADUS Balance Sheet & Liquidity
ADUS 5-Year Financial Trend
5-Year Trend Summary: Addus HomeCare Corp's revenue has grown significantly by 65% over the 5-year period, indicating strong business expansion. The most recent EPS of $3.83 reflects profitable operations.
ADUS Growth Metrics (YoY)
ADUS Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $289.8M | $20.2M | $1.10 |
| Q2 2025 | $286.9M | $18.1M | $1.10 |
| Q1 2025 | $280.7M | $15.8M | $0.97 |
| Q3 2024 | $270.7M | $15.4M | $0.95 |
| Q2 2024 | $260.0M | $14.9M | $0.91 |
| Q1 2024 | $251.6M | $12.7M | $0.78 |
| Q3 2023 | $240.5M | $11.5M | $0.71 |
| Q2 2023 | $236.9M | $11.3M | $0.70 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ADUS Capital Allocation
ADUS SEC Filings
Access official SEC EDGAR filings for Addus HomeCare Corp (CIK: 0001468328)