Price Forecast:

Bullish Case: The successful resolution of legal burdens below expectations and continued M&A opportunities could spur growth, supporting a potential recovery in ACHC's share price driven by investor confidence in long-term fundamentals.

Bearish Case: Despite a resolution of legal issues, uncertainties around Medicaid redeterminations and ongoing regulatory pressures may hinder growth, increasing downside risks in the short term as negative sentiment lingers.

Potential Outcomes:

1. Positive market reception of upcoming earnings report (60% probability).

2. Increased regulatory scrutiny impacts stock negatively (45%).

3. Medicaid redeterminations lead to patient volume losses (unknown probability).

4. M&A activity expands market share (65% probability).

Trading Oracle: Consider a bullish stance riding on long-dated credit spreads, such as selling the January 2025 $40 puts while buying the $35 puts for added downside protection. Capture possible gains in the 6-12 month horizon as ACHC prices stabilize post-legal strain, leveraging favorable implied volatility trades. Maintain a balanced risk-reward profile with a target profit of 150%.

November 15, 2024