Ardent Health (ARDT), an operator of hospitals and health care clinics, says it recently changed how it estimates the collectibility of its Accounts Receivable.

Initially, the company describes the change as a “modification to the technique” used to derive the estimate and says it’s based on a “hindsight evaluation of historical collection trends”.

But later in its latest annual report, Ardent says that during Q3 2025 it implemented a new revenue accounting system that:

“...provided management with additional information to more precisely estimate the collectability of accounts receivable, particularly with respect to more timely consideration of payor denial and payment trends.”

The information provided by the new system combined with the analysis of historical collection trends resulted in the erasure of $42.6 million in revenue.

The $42.6 million that vanished indicates Ardent:

—Overstated sales 2.7% in Q3 2025
—Overstated sales 0.67% in full year 2025

In early 2026, Ardent revealed multiple lawsuits have been filed accusing the company of lying to investors, in part, about its receivables the previous two years.

With an Enterprise Value (EV) of approximately $3.5 billion, Ardent is priced as if it will grow annual sales to more than $11.5 billion, up from an estimated $6.5 billion in 2026. To justify its current share price of $9.30 our Reverse DCF— which quantifies investor expectations embedded in the current share price— indicates Ardent must:

—Grow sales 6.2% annually for the next decade, faster than the consensus 2026 estimate of 3.7% and 2025 sales growth of 6%
—Increase NOPAT margin to 4%, versus our 2025 estimate of 2.6% and three-year average estimate of 2.8%
—Increase Invested Capital (IC) Turns to 2.1, up from our three-year estimates of 1.5

Notably, the current share price also implies Ardent increases Return on Invested Capital (ROIC) to 8.4% from our three-year average estimate of 4.2%: