。
She's hanging out with a bad crowd.
Literal
She [topic-は] bad company [with-と] is-associating.
付き合う covers a wide social range: 'associate with, keep company, go around with, date.' Context picks the meaning — with 仲間 ('company, peers') it reads as 'spending time with,' often with a worried/disapproving tone when 悪い modifies 仲間. With a romantic partner, the same verb means 'date.' The と marks the accompaniment partner (the one being kept company with). The pattern is staple parent-worry vocabulary: 'she's running with the wrong crowd.'