AdaptHealth Valuation Amid Mixed Returns and Large Capitated Contract: Assessing Fair Value

AdaptHealth (AHCO) has seen mixed returns over the past year, with a 16.08% 90-day share price return and a 9.72% year-to-date return. However, the company reports annual revenue of $3.26 billion and net income of $75.28 million. A newly signed five-year, $1+ billion exclusive capitated contract with a major national health system is expected to drive significant topline revenue expansion and stabilize net earnings through a higher mix of recurring revenue. The most followed narrative points to a higher fair value, built on specific growth and profitability assumptions.