AdaptHealth at UBS Global Healthcare Conference: Kaiser turns a corner

AdaptHealth (AHCO) presented a strategic reset at the UBS Global Healthcare Conference on November 10, 2026. CEO Suzanne Foster detailed the company's progress on the Kaiser Permanente contract, portfolio reduction, and supply chain issues. While acknowledging 2026 as a challenging transition year with certain business lines under pressure, AdaptHealth is positioning itself for 2027 with a more focused portfolio, improved operations, and lower debt.

The company reported a 14% run-rate margin in September for the Kaiser contract, up from negative margins in earlier quarters. Management anticipates completing the Kaiser baseline negotiations by year-end 2026 and achieving a 20% margin by late 2027. Despite facing execution risks, including ongoing negotiations with Kaiser and supplier pricing talks, AdaptHealth remains optimistic about its core organic growth, which reached 4% year-to-date.

The company also secured two new capitated wins covering over 70,000 lives, expected to maintain margins at or above the corporate average. Looking ahead, AdaptHealth aims to expand on the West Coast and reduce debt, with a sale of its diabetes segment to Cardinal Health expected in the first half of 2027. The transaction carries $30 million in allocated costs, with $10 million disappearing immediately and $20 million cleared within 2027.

After the sale, the company's leverage is projected to be around 3.0x, with a long-term target of 2.5x. AHCO's stock experienced a 17% surge over the past week, now trading at $7.74, up from a 26% year-to-date decline. The stock trades near the middle of its 52-week range of $5.21 to $13.43, indicating potential undervaluation according to InvestingPro analysis.