What Happened?

Shares of behavioral health company Acadia Healthcare (NASDAQ: ACHC) jumped 24% in the afternoon session after the company announced the departure of Christopher H. Hunter and immediately reappointed former CEO Debra K. Osteen to lead. 

Osteen previously served as Acadia's CEO from December 2018 to March 2022. During that time, she was credited with turning the business around, which led to a near 100% increase in the stock's price. The market's strong positive reaction suggested investors were optimistic about her return. Analysts noted her successful track record as a reason for investor confidence. Adding to the news, Acadia reaffirmed its full-year 2025 financial guidance, which indicated stability in the company's underlying business outlook despite the leadership change.

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What Is The Market Telling Us

Acadia Healthcare’s shares are extremely volatile and have had 30 moves greater than 5% over the last year. But moves this big are rare even for Acadia Healthcare and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 6 days ago when the stock dropped 6.4% on the news that 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.

Acadia Healthcare is up 1.4% since the beginning of the year, but at $14.48 per share, it is still trading 67.9% 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 $277.93.

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