Acadia Healthcare (ACHC) Surges 10.55% in Two-Day Rally, Hits 2025 High on Activist Reforms Push

The share price of Acadia Healthcare (ACHC) surged 3.31% intraday, reaching its highest level since October 2025, with a two-day rally pushing the stock up 10.55%. This rebound follows intensified scrutiny from activist investors and institutional stakeholders, who have been advocating for strategic and governance reforms at the company.

Activist hedge funds Khrom Capital Management and Engine Capital have driven much of the recent volatility by demanding a comprehensive review of Acadia’s operations and leadership structure. Their public calls for a potential sale and board overhaul have heightened investor uncertainty, though the company has yet to commit to such changes. Analysts note that while these pressures have amplified short-term volatility, the stock’s trajectory remains tied to the company’s ability to improve operational efficiency and earnings consistency.

Recent earnings reports underscore persistent challenges in cost management and facility performance. Despite a 9.2% year-over-year revenue increase to $869.23 million, net income fell sharply, highlighting underperforming locations and rising operating costs. A net margin of 4.31% and return on equity of 8.34% further signal lagging profitability, reinforcing activist arguments for structural reforms. Institutional investors have responded by adjusting their holdings, with some firms increasing stakes by over 50%, suggesting cautious optimism about the company’s discounted valuation.

Analyst sentiment remains mixed, with price targets diverging amid uncertainty over Acadia’s strategic direction. While eight analysts maintain a “Buy” rating, downgrades from firms like Guggenheim and Mizuho reflect skepticism about near-term execution risks. The stock’s recent 6.9% gain, though modest, indicates tentative confidence in the company’s long-term potential in the expanding behavioral health sector, provided governance and operational hurdles are addressed effectively.