Psychiatric Solutions shares rally 12%, upgraded

Email | Print By Paige Orr

10-29-2004 11:44 AM — Shares of Psychiatric Solutions (PSYS) jumped Friday morning on third-quarter earnings of 31 cents a share, a 72% increase over last year and in line with analysts’ estimates.

Psychiatric Solutions shares were up $1.74, or 7%, to $25.20 near midday, after earlier touching $26.25. Their 52-week range is $12.75-$29.04.

The company said third-quarter revenue was $131.6 million, an increase of 40% from the third quarter of 2003. Net income was $5.2 million, up from $2.1 million. EBITDA was $16.4 million, up 46%, producing a margin of 12.4%. Net cash from operating activities was $35.8 million, up from $13.2 million. Same-facility revenue per-patient-day increased 1.3%, and same-facility admissions increased 6.8%.

Impressed by same-facility revenue growth of 8.5%, Piper Jaffray analyst Darren Lehrich upgraded Psychiatric Solutions Friday morning from “market perform” to “outperform,” moving past his previous stance that the stock had gotten ahead of itself. Lehrich said good cash flow, consistent same-store metrics and solid margin leverage led him again to be “psyched up” to recommend the stock.

Analysts at Avondale Partners maintained their “market outperform rating.”