What Happened?
Shares of behavioral health company Acadia Healthcare (NASDAQ: ACHC) fell 6.4% in the afternoon session after the company disclosed an expected financial impact from a new Medicaid policy in New York, which prompted an analyst price target cut.
The new policy restricts reimbursement for patients who travel out of state for care, which created a significant challenge for the behavioral healthcare provider. Acadia Healthcare announced this would result in an estimated $25 million to $30 million headwind to its EBITDA. In response to the news, RBC Capital lowered its price target on the stock to $17.00 from $19.00. The stock's drop continued the negative momentum from the previous trading session, when shares also fell after the company first announced the anticipated financial impact.
The shares closed the day at $11.73, down 6.5% from previous close.
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What Is The Market Telling Us
Acadia Healthcare’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 23 days ago when the stock gained 2% on the news that a survey from research firm Cantor Fitzgerald highlighted strengthening healthcare volumes and provider optimism for future revenue and profit. The firm's fourth-quarter Private Hospital Executive Survey indicated that both inpatient and outpatient volumes were trending positively toward the end of 2025. This data suggested that full-year guidance for healthcare providers appeared achievable. The positive outlook for the sector seemed to boost investor confidence, signaling that broader industry trends were favorable for the company's performance in the upcoming year.
Acadia Healthcare is down 17.9% since the beginning of the year, and at $11.73 per share, it is trading 74% below its 52-week high of $45.11 from January 2025. Investors who bought $1,000 worth of Acadia Healthcare’s shares 5 years ago would now be looking at an investment worth $230.68.
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