Addus HomeCare (ADUS) reported impressive Q2 organic growth across its core personal care and hospice segments, while home health volume shows encouraging signs of inflection, RBC Capital Markets said in a Wednesday note.
While the hospice segment's $3 million Q2 cap accrual raised some client concerns, management reiterated its disciplined approach to patient and referral mix, which should prevent a further cap accrual this year, according to the note.
Same-store census remains modestly negative year over year, but Illinois and New Mexico are now posting sequential and year-over-year census growth, while trends in Texas remain flattish. The company expects Texas to follow the same trajectory in the second half of 2026, driven by a caregiver app rollout, the note added.
The proposed 2.1% net home health rate increase for 2027 is the first positive update in several years and is beginning to unlock M&A conversations in skilled home health, the brokerage said.
RBC maintained its outperform rating on Addus HomeCare and raised its price target to $134 from $130.
Shares of Addus HomeCare were up 2.1% in Wednesday trading.
Price: $116.02, Change: $+2.36, Percent Change: +2.08%