This Healthcare Stock Plunges 31%. Why Its Legal Costs Are Set to Double. -- Barrons.com

Dow Jones12-03

By George Glover

Acadia Healthcare stock was on course for its worst day in more than a quarter of a century on Wednesday, after the operator of psychiatric hospitals cut its earnings outlook due to ballooning legal costs.

Shares plummeted 31% to $11.45 in premarket trading. That would mark the largest percentage decrease for the stock since November 2000, according to Dow Jones Market Data. Futures tracking the S&P 500 were 0.2% higher.

The selloff came after Acadia said it was expecting professional and general liability expenses of $116 million this year, up from $54 million in 2024. It blamed a surge in patient-related litigation for the jump in legal costs.

As a result, Acadia now expects adjusted earnings of $1.94 to $2.04 a share for the year, having previously forecast $2.35 to $2.45 a share.

"The lack of earnings per share visibility will remain a valuation overhang on the stock in the near-term," Mizuho analyst Ann Hynes, who rates the stock at Neutral with a price target of $22, wrote in a research note.

It's the second time in less than a month that Acadia has lowered its full-year earnings outlook. The behavioral healthcare company also cut its guidance on Nov. 5, when it reported better-than-expected third-quarter results.

Write to George Glover at george.glover@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

December 03, 2025 08:18 ET (13:18 GMT)

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That would mark the largest percentage decrease for the stock since November 2000, according to Dow Jones Market Data. Futures tracking the S&P 500 were 0.2% higher. \n\n\n  The selloff came after Acadia said it was expecting professional and general liability expenses of $116 million this year, up from $54 million in 2024. It blamed a surge in patient-related litigation for the jump in legal costs. \n\n\n  As a result, Acadia now expects adjusted earnings of $1.94 to $2.04 a share for the year, having previously forecast $2.35 to $2.45 a share. \n\n\n  \"The lack of earnings per share visibility will remain a valuation overhang on the stock in the near-term,\" Mizuho analyst Ann Hynes, who rates the stock at Neutral with a price target of $22, wrote in a research note. \n\n\n  It's the second time in less than a month that Acadia has lowered its full-year earnings outlook. The behavioral healthcare company also cut its guidance on Nov. 5, when it reported better-than-expected third-quarter results. \n\n\n  Write to George Glover at george.glover@dowjones.com \n\n\n   This content was created by Barron's, which is operated by Dow Jones & Co. 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