Aman Budhwar of PenderFund Capital Management presented his investment thesis on Addus HomeCare (Nasdaq: ADUS) at Wide-Moat Investing Summit 2025.
Thesis Summary
Addus HomeCare is a well-positioned provider of home-based care services, serving approximately 45,600 patients across 23 U.S. states. Founded in 1979 and managed by the current team since 2016, Addus specializes in personal care, hospice, and home health segments. The company benefits from favorable long-term trends, including an aging U.S. population, increasing preference for cost-effective home-based care solutions, and a healthcare landscape shifting towards managed care, which favors larger, experienced providers. With 84% of its revenues from government programs, Addus enjoys a non-discretionary, stable demand profile.
The company’s personal care segment, constituting roughly three-quarters of total revenue and profit, has consistently delivered high-single-digit organic growth, supported by favorable pricing dynamics and margin improvements. Recent acquisitions, including the notable $350 million purchase of Gentiva’s personal care business at 6.5x EV/EBITDA multiple, have further solidified Addus’s market-leading position. While hospice operations experienced temporary disruptions during the COVID-19 pandemic, a recovery is underway, supported by leadership enhancements and increasing integration with the home health segment.
Despite regulatory concerns around Medicaid reimbursements and healthcare policy, Addus faces limited exposure to major risks, as management expects regulatory changes to be either neutral or beneficial. Its geographically diversified footprint further mitigates potential state-level funding risks. Operational efficiency, disciplined capital allocation, and accretive acquisitions underpin its sustainable growth strategy.
From a valuation perspective, Addus recently traded at approximately $115 per share, implying substantial upside to an estimated intrinsic value of $147 per share, based on a discounted cash flow analysis incorporating conservative mid-single-digit growth assumptions and margin expansion driven by operating leverage. With additional potential from prudent acquisitions and its strong defensive earnings profile, Addus represents an appealing investment opportunity with a clear growth runway and manageable risk profile.
Disclaimer
Wide-Moat Investing Summit 2025 was held from June 24 through July 9, 2025. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.
Slides
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