In a recent update, Guggenheim has boosted its price target for Ardent Health (ARDT, Financial) from $16 to $18, while maintaining a Buy rating on the company's shares. This decision follows Ardent's first-quarter EBITDA results, which slightly surpassed market expectations. Analysts highlight that ARDT shares remain particularly appealing in light of the present policy environment.
ARDT Key Business Developments
Release Date: May 07, 2025
- Revenue: Increased 4% to $1.5 billion compared to the prior year.
- Adjusted EBITDA: Grew 2.5% to $98 million in the first quarter.
- Admissions Growth: Increased 7.6% year over year.
- Adjusted Admissions Growth: Increased 2.7% year over year.
- Net Patient Service Revenue per Adjusted Admission: Grew 1.2%.
- Inpatient Surgery Growth: Increased 3.4% in the first quarter.
- Outpatient Surgeries: Declined 2.3% in the first quarter.
- Supply Cost as a Percent of Revenue: Declined 60 basis points year over year.
- Physician Professional Fees Growth: 6% in the first quarter, down from 13% growth in the prior year.
- Cash and Total Debt: Ended the first quarter with $495 million in cash and $1.1 billion in total debt.
- Total Available Liquidity: $790 million at the end of the first quarter.
- Cash Used in Operating Activities: $25 million in the first quarter.
- Capital Expenditures: $23 million in the first quarter.
- Net Leverage: 1.4 times as calculated under credit agreements.
- Lease Adjusted Net Leverage: Three times.
- S&P Credit Rating: Upgraded to B plus from B.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ardent Health Partners Inc (ARDT, Financial) reported a solid quarter with a 7.6% increase in admissions, driven by strong underlying growth and a heightened flu season.
- The company is well-positioned for long-term growth, focusing on market share expansion, outpatient and acute care hospital footprint growth, and operational initiatives.
- First quarter revenue increased by 4% to $1.5 billion, with adjusted EBITDA growing by 2.5% to $98 million.
- Ardent Health Partners Inc (ARDT) successfully integrated 18 Nextcare urgent care clinics, which is expected to generate additional downstream volumes in key markets.
- The company has a strong liquidity position with $495 million in cash and a favorable least adjusted net leverage ratio of three times.
Negative Points
- The growth rate of physician professional fees remains a headwind, although there are signs of moderation.
- There was a notable increase in payer claim denials compared to the first quarter of 2024, impacting year-over-year comparisons.
- Outpatient surgeries declined by 2.3% in the first quarter, partially due to the timing of leap year.
- The strategic transfer of certain oncology and infusion services to a health system partner tempered revenue growth by approximately 70 basis points.
- The company is awaiting final CMS approval for the 2025 New Mexico DPP program, which could impact financial results if delayed.
