ADUS Stock Study (6-3-26)

Posted by Mark on July 2, 2026 at 06:52 | Last modified: June 3, 2026 08:29

I recently did a stock study on Addus HomeCare Corp. (ADUS, $90.45). The previous stock study is here.

M* writes:

     > Addus HomeCare Corp is engaged in the provision of in-home care
     > services. The Company has three reportable segments: Personal
     > Care, Hospice, and Home Health. The Personal Care segment
     > provides non-medical assistance with activities of daily living,
     > mainly to the elderly, chronically ill, and disabled individuals. The
     > Hospice segment provides physical, emotional, and spiritual
     > care for terminally ill patients and their families. The Home
     > Health segment provides medical services to individuals
     > requiring care during illness or recovery. It generates the
     > majority of its revenue from the Personal Care segment.

Over the past 10 years, this medium-size company has grown sales and earnings 15.1% and 20.1% per year, respectively. Lines are up, straight, and parallel. Value Line (VL) gives an Earnings Predictability score of 90. Shares outstanding increase 62.8% (5.6%/year).

Over the past 10 years, PTPM leads peer averages but trails the industry while increasing from 4.0% to 9.0% (’25) with a last-5-year mean of 7.7%. ROE leads peer and industry averages while ranging from 6.0% in ’19 to 9.2% in ’25 with a last-5-year mean of 8.4% (shareholder equity consistently positive and increasing with 22.5% CAGR). Debt-to-Capital is less than peer and industry averages while ranging from 5.9% in ’18 to 31.6% in ’20 with a last-5-year mean of 21.8%.

Quick ratio is 1.7 and interest coverage 12.3 per M* who assigns “Narrow” [quantitative] Economic Moat and a B grade for Financial Health (per BetterInvesting® website). VL gives an B++ grade for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 6.7% and 4.8% for ’26 and ’27, respectively (based on 12 analysts).
• Zacks gives YOY ACE 6.5% and 4.4% for ’26 and ’27 (4 analysts).
• CFRA gives ACE 6.7% YOY and 5.7% per year for ’26 and ’25-’27, respectively (12).
• M* gives 2-year ACE of 5.1% per year.

My 4.0% per year forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 9.9% and 8.2% per year for ’25-’27 and ’25-’28, respectively (based on 14 analysts).
• Nasdaq.com gives YOY ACE 8.2% for ’27 (5 analysts).
• Seeking Alpha projects 4-year CAGR of 11.7%.
• Finviz gives 5-year annualized ACE of 8.0% (7).
• LSEG projects LTG of 7.2%.
• YF gives YOY ACE 12.2% and 6.9% for ’26 and ’27, respectively (14).
• Zacks gives YOY ACE 12.0% and 7.2% for ’26 and ’27 along with 5-year CAGR of 11.7% (5).
• VL gives 5-year ACE of 11.7% (4).
• CFRA gives ACE 33.9% YOY and 19.6% per year for ’26 and ’25-’27 (14).
• M* gives long-term ACE of 15.0%.

My 7.0% forecast is below the long-term-estimate range (mean of six: 10.9%). Initial value is ’25 EPS of $5.22/share rather than 2026 Q1 EPS of $5.41 (TTM).

My Forecast High P/E is 27.0. Over the past decade, high P/E falls from 34.6 to 26.2 (’25) with last-5-year mean of 34.8 and a last-5-year-mean average P/E of 28.2. I am below the range.

My Forecast Low P/E is 13.0. Over the past decade, low P/E ranges from 14.6 in ’16 to 32.0 in ’19 with a last-5-year mean of 21.5. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $67.90 is default based on initial value from above: 24.9% less than previous close and 23.3% below the 52-week low.

These inputs land ADUS in the BUY zone with a U/D ratio of 4.4. Total Annualized Return (TAR) is 16.0%.

PAR (using Forecast Average—not High—P/E) of 9.6% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on 329 studies done in the past 90 days (my study and 98 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 9.2%, 11.7%, 27.7, and 19.4, respectively. I am lower across the board.

MS high / low EPS are $9.20 / $5.13 versus my $7.32 / $5.22 (per share). My high EPS is less due to a lower growth rate.

MS LSPF of $83.00 implies a Forecast Low P/E of 16.2: less than the above-stated 19.4. MS LSPF is 16.6% less than the default $5.13/share * 19.4 = $99.52 resulting in more conservative zoning. MS LSPF is still 22.2% greater than mine.

MOS is robust in the study because my inputs are less than historical/analyst/MS averages/ranges. MS TAR exceeding mine by 5.4% supports the assessment along with my substantially lower LSPF.

With regard to valuation, PEG is 0.8 and 2.2 per M* and my projected P/E: fairly valued on average. Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.60. M* reports the stock at a 25% discount.

I don’t love the company’s share dilution over the past decade. Despite any consequent EPS pressure, the historical growth story is impressive. Projections suggest these days as a high-quality growth stock may be numbered, however.

Per U/D, ADUS is a BUY right now under $98/share. Given a forecast high price ~$190, the BetterInvesting® TAR criterion is met [190.3 / ((14.87 / 100 ) +1 ) ^ 5] ~ $95 (no dividend).

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).

Categories: BetterInvesting® | Comments (0) | Permalink