ADUS

Addus is executing a clean, durable growth story. Revenue has compounded from $864M in FY2021 to $1.42B in FY2025 (+23.2% YoY in the latest year), and net income has roughly doubled over the same span to $95.9M (+30.3% YoY), with diluted EPS reaching $5.22. Operating income grew even faster than revenue (+35.0%), and management's Adjusted EBITDA rose to $180.0M from $140.3M — evidence of genuine operating leverage, not just acquired top line. Crucially, this growth is now being funded conservatively: long-term debt fell 44.6% to $121M, total liabilities dropped 20.4%, and liabilities/equity sits at a fortress-like 0.32x against $1.09B of equity. This is a company throwing off real cash ($112M operating cash flow) with trivial capex needs ($7.7M), buying growth (Gentiva at $353.6M, plus tuck-ins like Helping Hands and Gold Horses) while paying down the revolver.

The valuation does not reflect this. At $98.05 the stock trades at 18.8x trailing EPS and just 1.3x sales — for a business growing earnings 30%, that's a PEG comfortably below 1. On an enterprise basis (~$1.82B cap, net debt only modestly positive given $98.9M cash and $121M LT debt) the company changes hands around ~10x Adjusted EBITDA, undemanding for a defensive, secular-growth health-services compounder. The market is paying a low-teens-to-high-teens multiple for a low-twenties grower; that gap is the opportunity.