Investment Thesis
AdaptHealth demonstrates deteriorating profitability with negative net income of -$70.8M and a concerning net margin of -2.2%, indicating the company is unprofitable despite $3.2B in revenue. The company faces severe financial stress with an interest coverage ratio of 0.9x (unable to cover interest from operating income), high leverage at 1.14x debt-to-equity, and weak liquidity with a current ratio of only 1.02x. While operating cash flow of $601.8M and free cash flow of $219.4M provide some operational relief, the underlying business fundamentals show deteriorating returns (negative ROE and ROA) that suggest structural profitability challenges.
AHCO Strengths
- Positive operating cash flow of $601.8M demonstrates cash generation capability from core operations
- Free cash flow of $219.4M after capital expenditures provides buffer for debt service and strategic flexibility
- Moderate capital intensity with CapEx at 11.9% of revenue suggests efficient asset utilization
AHCO Risks
- Net loss of $70.8M with negative 2.2% net margin indicates fundamental unprofitability and margin compression
- Interest coverage of 0.9x is dangerously low - operating income insufficient to cover interest expense, signaling distress
- High leverage (1.14x debt-to-equity) combined with $1.7B long-term debt and deteriorating profitability creates debt sustainability concerns
- Weak liquidity with current ratio of 1.02x and quick ratio of 0.81x limits financial flexibility
- Declining ROE (-4.7%) and ROA (-1.6%) indicate deteriorating returns on shareholder and asset capital
- Revenue essentially flat YoY (-0.5%) with no organic growth offset
Key Metrics to Watch
- Net income trending - path to profitability critical; any further deterioration signals deeper issues
- Interest coverage ratio - must improve above 1.5x to demonstrate debt service sustainability
- Operating margin expansion - determine if 2.8% is a floor or will compress further
- Debt reduction progress - monitor whether FCF is deployed to reduce leverage below 1.0x
- Working capital management - track current ratio trend given tight 1.02x level
AHCO Financial Metrics
AHCO Profitability Ratios
AHCO Balance Sheet & Liquidity
AHCO 5-Year Financial Trend
5-Year Trend Summary: AdaptHealth Corp.'s revenue has grown significantly by 33% over the 5-year period, indicating strong business expansion. The most recent EPS of $-5.31 indicates the company is currently unprofitable.
AHCO Growth Metrics (YoY)
AHCO Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $805.9M | $22.9M | $0.15 |
| Q2 2025 | $800.4M | $7.5M | $0.05 |
| Q1 2025 | $777.9M | -$2.1M | $-0.02 |
| Q3 2024 | $804.0M | $22.9M | $0.15 |
| Q2 2024 | $793.3M | $14.0M | $0.03 |
| Q1 2024 | $744.6M | -$2.1M | $-0.02 |
| Q3 2023 | $756.5M | $16.1M | $0.11 |
| Q2 2023 | $727.6M | $14.0M | $0.03 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
AHCO Capital Allocation
AHCO SEC Filings
Access official SEC EDGAR filings for AdaptHealth Corp. (CIK: 0001725255)