Acadia Healthcare (NASDAQ: ACHC) and Streamline Health Solutions (NASDAQ:STRM) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Volatility & Risk

Acadia Healthcare has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Streamline Health Solutions has a beta of 0.09, suggesting that its stock price is 91% less volatile than the S&P 500.

Profitability

This table compares Acadia Healthcare and Streamline Health Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acadia Healthcare 6.07% 8.57% 3.22%
Streamline Health Solutions -24.50% -56.04% -15.49%

Earnings & Valuation

This table compares Acadia Healthcare and Streamline Health Solutions’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Acadia Healthcare $2.83 billion 1.03 $574.61 million $1.97 16.88
Streamline Health Solutions $24.86 million 1.32 -$3.83 million ($0.31) -5.32

Acadia Healthcare has higher revenue and earnings than Streamline Health Solutions. Streamline Health Solutions is trading at a lower price-to-earnings ratio than Acadia Healthcare, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Acadia Healthcare and Streamline Health Solutions, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Healthcare 0 5 8 1 2.71
Streamline Health Solutions 0 0 0 0 N/A

Acadia Healthcare currently has a consensus price target of $46.42, indicating a potential upside of 39.60%. Given Acadia Healthcare’s higher probable upside, equities analysts plainly believe Acadia Healthcare is more favorable than Streamline Health Solutions.

Insider and Institutional Ownership

37.9% of Streamline Health Solutions shares are held by institutional investors. 11.1% of Acadia Healthcare shares are held by insiders. Comparatively, 26.1% of Streamline Health Solutions shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Acadia Healthcare beats Streamline Health Solutions on 10 of the 13 factors compared between the two stocks.

About Acadia Healthcare

Acadia Healthcare Company, Inc. is a provider of behavioral healthcare services, with operations in the United States and the United Kingdom. The Company focuses on acquiring and developing behavioral healthcare facilities. The Company operates through two segments: U.S. Facilities and U.K. Facilities. The Company is engaged in operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As of December 31, 2016, the U.S. Facilities segment included 208 behavioral healthcare facilities with approximately 8,500 beds in 39 states and Puerto Rico, and the U.K. Facilities segment included 365 behavioral healthcare facilities with approximately 8,600 beds in the United Kingdom. As of December 31, 2016, the Company had operated 573 behavioral healthcare facilities with approximately 17,100 beds in 39 states, the United Kingdom and Puerto Rico.

About Streamline Health Solutions

Streamline Health Solutions, Inc. is engaged in providing healthcare information technology through the licensing of its Electronic Health Information Management, Patient Financial, Coding and Clinical Documentation Improvement (CDI), and other Workflow software applications, and the use of such applications by software as a service. The Company also provides implementation and consulting services to complement its software solutions. The Company provides computer software-based solutions through its Looking Glass platform. The Company sells its solutions and services in North America to hospitals and health systems, including physician practices, through its direct sales force and its reseller partnerships. The Company’s software and services allow hospitals and integrated healthcare delivery systems in the United States and Canada to capture, store, manage, route, retrieve and process patient clinical, financial and other healthcare provider information.

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