Investment Thesis
AdaptHealth is fundamentally distressed with negative profitability (-2.0% net margin), critical debt servicing issues (0.1x interest coverage), and negative free cash flow despite positive operating cash flow. Weak liquidity (0.92x current ratio, only $48M cash) combined with flat revenue growth and $1.8B long-term debt creates severe financial stress.
Strengths
- Positive operating cash flow of $93.7M demonstrates core business generates cash
- Established revenue base of $819.8M in essential home health care services
- Debt-to-equity ratio of 1.21x is manageable relative to highly leveraged peers
Risks
- Interest coverage ratio of 0.1x indicates company cannot service debt from operating income—critical solvency risk
- Negative free cash flow of -$27.5M despite positive operating cash flow due to high capex, signaling cash burn
- Liquidity crisis with current ratio of 0.92x and minimal cash reserves ($48M) creating refinancing pressure
- Persistent unprofitability with -2.0% net margin and negative ROE/ROA indicating structural operational challenges
- Revenue stagnation (-0.5% YoY) with no visible growth trajectory in mature market
Key Metrics to Watch
- Interest coverage ratio trajectory—must improve above 1.0x for viability
- Free cash flow and cash balance—monitor for covenant breaches or refinancing needs
- Net margin expansion—requires operational improvements to achieve profitability
- Revenue growth acceleration—flat performance is unsustainable given debt burden
Financial Metrics
Revenue
819.8M
Net Income
-16.0M
EPS (Diluted)
$-0.12
Free Cash Flow
-27.5M
Total Assets
4.4B
Cash
48.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
0.7%
Net Margin
-2.0%
ROE
-1.1%
ROA
-0.4%
FCF Margin
-3.4%
Balance Sheet & Liquidity
Current Ratio
0.92x
Quick Ratio
0.71x
Debt/Equity
1.21x
Debt/Assets
65.8%
Interest Coverage
0.05x
Long-term Debt
1.8B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T07:52:13.262227 |
Data as of: 2026-03-31 |
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