Latest news with #SelectMedical
Yahoo
16-05-2025
- Business
- Yahoo
SEM Q1 Earnings Call: Regulatory Headwinds and Mixed Division Performance Shape Outlook
Healthcare services company Select Medical (NYSE:SEM) missed Wall Street's revenue expectations in Q1 CY2025 as sales rose 2.4% year on year to $1.35 billion. The company's full-year revenue guidance of $5.4 billion at the midpoint came in 1.6% below analysts' estimates. Its GAAP profit of $0.44 per share was 7.3% below analysts' consensus estimates. Is now the time to buy SEM? Find out in our full research report (it's free). Revenue: $1.35 billion vs analyst estimates of $1.39 billion (2.4% year-on-year growth, 2.6% miss) EPS (GAAP): $0.44 vs analyst expectations of $0.47 (7.3% miss) Adjusted EBITDA: $151.4 million vs analyst estimates of $166.5 million (11.2% margin, 9.1% miss) The company dropped its revenue guidance for the full year to $5.4 billion at the midpoint from $5.5 billion, a 1.8% decrease EPS (GAAP) guidance for the full year is $1.14 at the midpoint, beating analyst estimates by 1.8% EBITDA guidance for the full year is $520 million at the midpoint, below analyst estimates of $531.3 million Operating Margin: 8.3%, in line with the same quarter last year Free Cash Flow was -$55.8 million compared to -$119.2 million in the same quarter last year Sales Volumes fell 1.9% year on year (1% in the same quarter last year) Market Capitalization: $1.96 billion Select Medical's first quarter results reflected the company's ongoing transition following the Concentra spin, with divergent trends across its main business lines. Management attributed the quarter's performance to robust growth in the inpatient rehabilitation division, which offset challenges in both outpatient and critical illness recovery hospital operations. CEO Robert Ortenzio cited severe weather events and Medicare reimbursement reductions as primary pressures on outpatient results, while regulatory changes and a delayed flu season weighed on the critical illness recovery segment. Looking ahead, management's guidance is shaped by ongoing regulatory uncertainty and shifting payer dynamics. The team expressed cautious optimism about inpatient rehabilitation expansion, noting a strong development pipeline and recent facility openings. However, they acknowledged persistent headwinds in the critical illness recovery segment, including higher outlier thresholds and the impact of the 20% transmittal rule. Management stated, "We are constantly having conversations both on the regulatory side with the new CMS administration and on the legislative side," underscoring the unpredictable reimbursement environment. Select Medical's leadership focused on the mixed performance across its divisions and the external factors impacting results. Management highlighted division-specific drivers and detailed ongoing initiatives to mitigate recent headwinds and support future growth. Inpatient Rehab Outperformance: The inpatient rehabilitation division delivered double-digit revenue and EBITDA growth, supported by both increased daily rates and a robust pipeline of new facility openings and expansions. Management pointed to occupancy rates above 80% in mature hospitals and a multi-year plan to add 440 new beds. Regulatory Headwinds in Critical Illness Recovery: The critical illness recovery hospital segment faced regulatory challenges, particularly a sharp increase in the high cost outlier threshold and the 20% transmittal rule. Management estimated these changes accounted for two-thirds of the EBITDA decline for this segment, and noted ongoing discussions with the Centers for Medicare & Medicaid Services (CMS) to address these impacts. Outpatient Division Weather Disruption: Severe winter storms in key geographies and a 3% decline in Medicare reimbursement led to lower outpatient volumes and EBITDA. The division saw a late-quarter recovery, and management expects further improvements as technology and access initiatives progress. Technology and Margin Initiatives: Management emphasized ongoing investments in technology for the outpatient business, including a new software platform aimed at improving productivity and contract negotiations. Early benefits were observed, and management expects margin improvement as further releases are implemented. Strategic Capacity Management: The company continued to optimize its outpatient footprint by opening 10 new clinics and closing or consolidating 13 underperforming locations, aligning resources with market demand and supporting more efficient operations. Management's outlook for the remainder of the year centers on regulatory and reimbursement trends, the pace of rehab expansion, and operational improvements in challenged segments. Regulatory Uncertainty Remains: The company's earnings trajectory will depend on future CMS policy changes impacting critical illness recovery reimbursement, as well as ongoing advocacy to mitigate outlier threshold increases and transmittal rule effects. Rehabilitation Expansion Pipeline: A strong pipeline of new inpatient rehab facilities and bed additions is expected to drive segment growth, with management noting both signed projects and additional opportunities under evaluation. Margin Recovery Initiatives: Continued implementation of technology upgrades and productivity measures in the outpatient division are expected to support gradual margin improvement, although external factors such as weather and Medicare rates remain risks. Justin Bowers (Deutsche Bank): Asked about expected occupancy rates in new inpatient rehab facilities. Management guided for occupancy to remain above 85% in mature hospitals, even as new capacity comes online. Ben Hendrix (RBC Capital Markets): Inquired about mitigation strategies for regulatory headwinds in critical illness recovery hospitals. Management indicated active discussions with CMS and ongoing advocacy, but cautioned that policy changes may take time. William Sutherland (The Benchmark Company): Sought clarification on the magnitude and timing of high cost outlier impacts and start-up costs. Management confirmed that start-up losses remained consistent year over year, with most headwinds concentrated in the first six weeks of the quarter. William Sutherland (The Benchmark Company): Asked about outpatient margin improvement initiatives. Management described new technology rollouts and improved commercial contract rates as key drivers, with incremental benefits expected throughout the year. Anne Hines (Mizuho): Asked about potential acceleration in inpatient rehab expansion to diversify away from critical illness recovery. Management confirmed an acceleration beyond currently announced projects, citing a robust project pipeline and ongoing market evaluations. In the coming quarters, the StockStory team will monitor (1) regulatory developments and any CMS decisions related to reimbursement for critical illness recovery, (2) progress on opening new inpatient rehab facilities and the pace at which they reach targeted occupancy, and (3) the effectiveness of technology and operational initiatives aimed at restoring outpatient division margins. Additionally, trends in patient volumes and reimbursement rates across all segments will remain key indicators of business momentum. Select Medical currently trades at a forward P/E ratio of 13×. Should you double down or take your chips? See for yourself in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
11-05-2025
- Business
- Yahoo
Select Medical Holdings Corporation (NYSE:SEM) Pays A US$0.0625 Dividend In Just Three Days
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Select Medical Holdings Corporation (NYSE:SEM) is about to go ex-dividend in just 3 days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Thus, you can purchase Select Medical Holdings' shares before the 15th of May in order to receive the dividend, which the company will pay on the 29th of May. The company's next dividend payment will be US$0.0625 per share, on the back of last year when the company paid a total of US$0.25 to shareholders. Last year's total dividend payments show that Select Medical Holdings has a trailing yield of 1.7% on the current share price of US$14.92. If you buy this business for its dividend, you should have an idea of whether Select Medical Holdings's dividend is reliable and sustainable. As a result, readers should always check whether Select Medical Holdings has been able to grow its dividends, or if the dividend might be cut. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. It paid out 77% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. It could become a concern if earnings started to decline. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Luckily it paid out just 16% of its free cash flow last year. It's positive to see that Select Medical Holdings's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut. Check out our latest analysis for Select Medical Holdings Click here to see the company's payout ratio, plus analyst estimates of its future dividends. Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Readers will understand then, why we're concerned to see Select Medical Holdings's earnings per share have dropped 16% a year over the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks. Select Medical Holdings also issued more than 5% of its market cap in new stock during the past year, which we feel is likely to hurt its dividend prospects in the long run. Trying to grow the dividend while issuing large amounts of new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill. Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Select Medical Holdings's dividend payments per share have declined at 4.6% per year on average over the past 10 years, which is uninspiring. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders. From a dividend perspective, should investors buy or avoid Select Medical Holdings? We're not enthused by the declining earnings per share, although at least the company's payout ratio is within a reasonable range, meaning it may not be at imminent risk of a dividend cut. While it does have some good things going for it, we're a bit ambivalent and it would take more to convince us of Select Medical Holdings's dividend merits. If you're not too concerned about Select Medical Holdings's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For instance, we've identified 2 warning signs for Select Medical Holdings (1 is potentially serious) you should be aware of. If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-05-2025
- Business
- Yahoo
agilon health (AGL) Q1 Earnings Report Preview: What To Look For
Healthcare services company Agilon Health (NYSE:AGL) will be announcing earnings results tomorrow after the bell. Here's what to look for. agilon health met analysts' revenue expectations last quarter, reporting revenues of $1.52 billion, up 44.2% year on year. It was a softer quarter for the company, with full-year EBITDA guidance missing analysts' expectations and a significant miss of analysts' EPS estimates. It added 2,000 customers to reach a total of 527,000. Is agilon health a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting agilon health's revenue to decline 6.2% year on year to $1.51 billion, a reversal from the 52.2% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.01 per share. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. agilon health has missed Wall Street's revenue estimates six times over the last two years. Looking at agilon health's peers in the healthcare providers & services segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Encompass Health delivered year-on-year revenue growth of 10.6%, beating analysts' expectations by 1.7%, and Select Medical reported revenues up 2.4%, falling short of estimates by 2.6%. Encompass Health traded up 11.8% following the results while Select Medical was down 21.8%. Read our full analysis of Encompass Health's results here and Select Medical's results here. There has been positive sentiment among investors in the healthcare providers & services segment, with share prices up 4.3% on average over the last month. agilon health is down 2.4% during the same time and is heading into earnings with an average analyst price target of $4.32 (compared to the current share price of $4.15). Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Yahoo
02-05-2025
- Business
- Yahoo
Why Select Medical (SEM) Shares Are Falling Today
Shares of healthcare services company Select Medical (NYSE:SEM) fell 22.1% in the morning session after the company reported disappointing first-quarter 2025 results, with both revenue and earnings per share falling short of Wall Street's expectations. Margins declined across two of the three segments: adjusted EBITDA fell significantly in the critical illness recovery unit and slipped slightly in outpatient rehab. This margin pressure, especially in the largest business line, partly explained why adjusted EPS failed to meet expectations. On the other hand, Select Medical beat analysts' full-year EPS guidance expectations. Still, this quarter could have been better. The shares closed the day at $14.25, down 21.8% from previous close. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Select Medical? Access our full analysis report here, it's free. Select Medical's shares are not very volatile and have only had 7 moves greater than 5% over the last year. Moves this big are rare for Select Medical and indicate this news significantly impacted the market's perception of the business. The biggest move we wrote about over the last year was 2 months ago when the stock dropped 14.1% on the news that the company reported disappointing fourth quarter 2024 results, which missed across all key operating metrics. Its full-year revenue and EBITDA guidance also fell short of Wall Street's estimates. Overall, this was a weaker quarter. Select Medical is down 23.8% since the beginning of the year, and at $14.32 per share, it is trading 64.4% below its 52-week high of $40.20 from November 2024. Investors who bought $1,000 worth of Select Medical's shares 5 years ago would now be looking at an investment worth $989.63. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
Yahoo
01-05-2025
- Business
- Yahoo
Select Medical (NYSE:SEM) Misses Q1 Sales Targets, Stock Drops 10.3%
Healthcare services company Select Medical (NYSE:SEM) fell short of the market's revenue expectations in Q1 CY2025, with sales falling 24.4% year on year to $1.35 billion. The company's full-year revenue guidance of $5.4 billion at the midpoint came in 1.6% below analysts' estimates. Its GAAP profit of $0.44 per share was 7.3% below analysts' consensus estimates. Is now the time to buy Select Medical? Find out in our full research report. Revenue: $1.35 billion vs analyst estimates of $1.39 billion (24.4% year-on-year decline, 2.6% miss) EPS (GAAP): $0.44 vs analyst expectations of $0.47 (7.3% miss) Adjusted EBITDA: $151.4 million vs analyst estimates of $166.5 million (11.2% margin, 9.1% miss) The company dropped its revenue guidance for the full year to $5.4 billion at the midpoint from $5.5 billion, a 1.8% decrease EPS (GAAP) guidance for the full year is $1.14 at the midpoint, beating analyst estimates by 1.8% EBITDA guidance for the full year is $520 million at the midpoint, below analyst estimates of $531.3 million Operating Margin: 8.3%, down from 10.8% in the same quarter last year Free Cash Flow was -$55.8 million compared to -$119.2 million in the same quarter last year Sales Volumes fell 1.9% year on year (1% in the same quarter last year) Market Capitalization: $2.35 billion With a nationwide network spanning 46 states and over 2,700 healthcare facilities, Select Medical (NYSE:SEM) operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers across the United States. A company's long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Select Medical grew its sales at a tepid 2.2% compounded annual growth rate. This was below our standards and is a tough starting point for our analysis. Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. Select Medical's performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.7% annually. We can dig further into the company's revenue dynamics by analyzing its number of admissions, which reached 9,351 in the latest quarter. Over the last two years, Select Medical's admissions averaged 1.3% year-on-year declines. Because this number is in line with its revenue growth, we can see the company kept its prices fairly consistent. This quarter, Select Medical missed Wall Street's estimates and reported a rather uninspiring 24.4% year-on-year revenue decline, generating $1.35 billion of revenue. Looking ahead, sell-side analysts expect revenue to decline by 10.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Select Medical was profitable over the last five years but held back by its large cost base. Its average operating margin of 9% was weak for a healthcare business. Analyzing the trend in its profitability, Select Medical's operating margin decreased by 4.3 percentage points over the last five years. A silver lining is that on a two-year basis, its margin has stabilized. Still, shareholders will want to see Select Medical become more profitable in the future. In Q1, Select Medical generated an operating profit margin of 8.3%, down 2.5 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Select Medical's unimpressive 2.2% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded. In Q1, Select Medical reported EPS at $0.44, down from $0.75 in the same quarter last year. This print missed analysts' estimates. Over the next 12 months, Wall Street expects Select Medical's full-year EPS of $1.34 to shrink by 11%. It was encouraging to see Select Medical beat analysts' full-year EPS guidance expectations this quarter. On the other hand, its revenue missed significantly and its EPS fell short of Wall Street's estimates. Overall, this was a weaker quarter. The stock traded down 10.3% to $16.36 immediately following the results. Select Medical didn't show it's best hand this quarter, but does that create an opportunity to buy the stock right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
