Why Acadia Healthcare (ACHC) Stock Is Plummeting Today

Recent Developments

Acadia Healthcare (NASDAQ:ACHC), a company specializing in behavioral health, experienced a 6.4% decline in its share price during the afternoon trading session. This drop followed the company's announcement regarding the anticipated financial consequences of a new Medicaid regulation in New York, which also led an analyst to lower their price target for the stock.

The updated Medicaid rule limits reimbursements for patients seeking treatment outside of New York, posing a considerable obstacle for Acadia Healthcare. The company projected that this change would negatively impact its EBITDA by approximately $25 million to $30 million. In reaction to this update, RBC Capital revised its price target for Acadia Healthcare from $19.00 down to $17.00. The stock's decline extended losses from the previous session, when shares also fell after the company initially revealed the expected financial setback.

By the end of the trading day, Acadia Healthcare's stock closed at $11.73, marking a 6.5% decrease from the prior close.

Market Perspective

Acadia Healthcare’s stock is known for its volatility, having experienced 29 separate moves exceeding 5% over the past year. In this context, the latest decline suggests that while investors view the news as important, it is not expected to fundamentally alter the company’s long-term outlook.

The last significant movement occurred 23 days ago, when shares rose 2% after a Cantor Fitzgerald survey indicated rising healthcare volumes and growing optimism among providers regarding future revenue and profitability. The firm’s fourth-quarter Private Hospital Executive Survey showed that both inpatient and outpatient activity was improving as 2025 approached, implying that annual guidance for healthcare providers was within reach. This positive sentiment appeared to lift investor confidence, reflecting a favorable industry environment for Acadia Healthcare in the coming year.

Since the start of the year, Acadia Healthcare’s stock has fallen 17.9%. At $11.73 per share, it currently trades 74% below its 52-week high of $45.11, set in January 2025. An investor who purchased $1,000 worth of Acadia Healthcare shares five years ago would now see their investment valued at just $230.68.

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