Key Takeaways SEM reported Q3 EPS of 23 cents, beating estimates but falling 11.5% year over year.Revenues rose 7.2% to $1.4 billion, lifted by strength in Rehabilitation Hospital and higher visits. Adjusted EBITDA rose 7.5% year over year to $111.7 million amid cost pressures. Shares of Select Medical Holdings Corporation (SEM) have declined 5.4% since it reported third-quarter 2025 results on Oct. 30. The quarterly results were affected by an elevated expense level. Additionally, a decline in patient days ...

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - Identifying the right entry point for momentum stocks is challenging, and investors may end up with overvalued shares [1] Group 2: Bargain Momentum Stocks - Investing in bargain stocks that have recently shown price momentum may be a safer strategy [2] - The Zacks Momentum Style Score is useful for identifying strong momentum stocks, while the 'Fast-Paced Momentum at a Bargain' screen helps find attractively priced fast-moving stocks [2] Group 3: Select Medical (SEM) Analysis - Select Medical (SEM) has a four-week price change of 2.5%, indicating growing investor interest [3] - SEM gained 7.8% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - SEM has a beta of 1.3, suggesting it moves 30% more than the market in either direction [4] Group 4: Valuation and Earnings Estimates - SEM has a Momentum Score of B, indicating a favorable time to invest [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [6] - SEM is trading at a Price-to-Sales ratio of 0.31, meaning investors pay 31 cents for each dollar of sales, indicating a reasonable valuation [6] Group 5: Additional Investment Opportunities - Besides SEM, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen [7] - Zacks offers over 45 Premium Screens to help identify potential winning stock picks based on various investing styles [8]

分组1 - Select Medical (SEM) shares have increased by 2.5% over the past four weeks, closing at $13.37, with a mean price target of $18.17 indicating a potential upside of 35.9% [1] - The mean estimate consists of six short-term price targets with a standard deviation of $2.64, where the lowest estimate is $14.00 (4.7% increase) and the highest is $21.00 (57.1% increase) [2] - Analysts show strong agreement in revising SEM's earnings estimates higher, which correlates with potential stock price increases [11][12] 分组2 - The Zacks Consensus Estimate for SEM has risen by 4.5% over the past month, with two estimates increasing and no negative revisions [12] - SEM holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] - While consensus price targets may not be reliable for predicting exact gains, they can indicate the direction of price movement [14]

Core Insights - Select Medical Holdings Corporation (SEM) is a key player in the healthcare sector, focusing on critical illness recovery, inpatient rehabilitation, and outpatient therapy, with a network of hospitals and clinics across the U.S. [1] - SEM has demonstrated resilience with a 30-day gain of 3.15%, although it experienced a slight decline of 2.82% over the last 10 days, which may present a strategic entry point for investors [2] - Analysts estimate a significant upside of 26.68% for SEM, with a target price set at $17, indicating strong growth potential [3] - The company has a robust financial standing, evidenced by a Piotroski Score of 8, highlighting its strong fundamentals in profitability, leverage, liquidity, and operating efficiency [4] - Overall, SEM represents a compelling investment opportunity due to its strong financial metrics and recent stock price dip, making it attractive for long-term growth [5] Performance Analysis - SEM's recent performance includes a 30-day gain of 3.15% and a 10-day decline of 2.82%, suggesting volatility but also potential for recovery [2][6] Growth Potential - The estimated upside for SEM is 26.68%, with a target price of $17, reflecting analysts' confidence in the stock's appreciation potential [3][6] Financial Health - SEM's Piotroski Score of 8 indicates solid financial fundamentals, positioning the company well for sustained growth and stability in the competitive healthcare market [4][6]

Core Insights - The company plans to add 395 inpatient rehabilitation beds by 2027 through new openings and strategic additions, including a 45-bed hospital in Temple, Texas, and a 32-bed unit in Orlando, Florida [1][5] - The delay of the 20% transmittal rule by CMS is seen as beneficial, allowing for a favorable revenue adjustment this quarter, with expectations of a smaller impact in future periods due to stabilized labor costs [2][3][29] - Revenue for the third quarter grew over 7% to $1.36 billion, with adjusted EBITDA also increasing over 7% to $111.7 million, and earnings per share from continuing operations rose over 21% to $0.23 [7][12] Development and Expansion - The company opened a fourth rehab hospital in partnership with the Cleveland Clinic, adding 32 new beds, and plans to open additional facilities in 2026 and 2027, including a 76-bed rehab hospital in Jersey City, New Jersey [1][5] - Future development efforts will focus on the inpatient rehabilitation segment, with plans to add two acute rehab units and two neurotransitional units [5][6] Financial Performance - Inpatient rehab hospital revenue increased 16% year over year to $328.6 million, with adjusted EBITDA up 13% to $68 million [7][9] - The outpatient rehab division saw a revenue increase of 4% to $325.4 million, but adjusted EBITDA decreased over 14% to $24.2 million due to a reduction in Medicare reimbursement and unfavorable payer mix [8][9] - The critical illness recovery hospital division's revenue increased over 4% to $609.9 million, with adjusted EBITDA rising over 10% to $56.1 million [9] Regulatory Environment - The CMS's deferment of the expanded Medicare outlier reconciliation criteria is viewed positively, although further reforms are needed to support treatment for high acuity patients [2][4][19] - The fixed loss threshold for outlier payments has increased significantly over the past four years, impacting the ability to accommodate acutely ill patients [16][20] Capital Management - The company ended the quarter with $1.8 billion in debt and $60.1 million in cash, maintaining a net leverage of 3.4 times [10][11] - A cash dividend of $0.0625 per share was approved, reflecting the company's commitment to enhancing shareholder value [6]

Select Medical (NYSE:SEM) Q3 2025 Earnings Call October 31, 2025 09:00 AM ET Speaker2Good morning, and thank you for joining us today for Select Medical Holdings Corporation's earnings conference call to discuss the third quarter 2025 results and the company's business outlook. Presenting today are the company's Executive Chairman and Co-Founder, Robert Ortenzio, the company's Chief Executive Officer, Thomas Mullen, and the company's Executive Vice President and Chief Financial Officer, Michael Malatesta. A ...

Core Insights - Select Medical (SEM) reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, but down from $0.5 per share a year ago, representing an earnings surprise of +27.78% [1] - The company posted revenues of $1.36 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.87%, but down from $1.76 billion year-over-year [2] - Select Medical shares have declined approximately 24.2% year-to-date, contrasting with the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $1.36 billion, and for the current fiscal year, it is $1.18 on revenues of $5.38 billion [7] - The estimate revisions trend for Select Medical was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Medical - HMOs industry, to which Select Medical belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Humana (HUM), another company in the same industry, is expected to report quarterly earnings of $2.91 per share, reflecting a year-over-year decline of -30.1%, with revenues anticipated to be $31.98 billion, up 9.1% from the previous year [9][10]

Revenue Performance - Revenue for Q3 2025 increased 7.2% to $1,363.4 million compared to $1,271.6 million in Q3 2024[3] - For the nine months ended September 30, 2025, revenue increased 4.7% to $4,056.2 million compared to $3,874.5 million in the same period of 2024[4] - The rehabilitation hospital segment saw a revenue increase of 16.2% to $328.6 million in Q3 2025 compared to $282.7 million in Q3 2024[9] - The outpatient rehabilitation segment's revenue increased 3.2% to $960.3 million for the nine months ended September 30, 2025, compared to $930.7 million in the same period of 2024[12] - Total revenue for Q3 2025 increased to $609,929, a 4.6% rise from $582,950 in Q3 2024[33] - Total revenue for the nine months ended September 30, 2025 was $1,848,098, a slight increase of 0.2% from $1,843,751 in 2024[34] Income and Earnings - Income from continuing operations before other income and expense rose 32.9% to $73.0 million for Q3 2025, up from $54.9 million in Q3 2024[3] - Net income attributable to Select Medical decreased by 48.2% to $28,793 in Q3 2025 from $55,628 in Q3 2024[24] - Income from continuing operations before income taxes rose by 22.5% to $55,929 in Q3 2025, up from $45,650 in Q3 2024[24] - Earnings per share for continuing operations increased to $0.23 in Q3 2025 from $0.19 in Q3 2024[29] - Net income for Q3 2025 decreased to $44,180, down 45.5% from $81,015 in Q3 2024[31] - Adjusted income from continuing operations, net of tax, attributable to common shares for Q3 2024 was $32,151,000, compared to $28,087,000 in Q3 2025, reflecting a decrease of 12.5%[42] Adjusted EBITDA - Adjusted EBITDA for Q3 2025 increased 7.5% to $111.7 million compared to $103.9 million in Q3 2024[3] - Adjusted EBITDA for Q3 2025 rose to $56,102, reflecting a 10.5% increase compared to $50,763 in Q3 2024[33] - The Adjusted EBITDA margin for the critical illness recovery hospital segment was 10.8% for the nine months ended September 30, 2025, down from 12.9% in the same period of 2024[8] - Select Medical's rehabilitation hospital segment generated $60,117,000 in Adjusted EBITDA for Q3 2024, increasing to $67,956,000 in Q3 2025, a growth of 13.0%[38] - Full year 2025 Adjusted EBITDA is projected to range between $510,000,000 and $530,000,000[46] Cash Flow and Expenses - Cash provided by operating activities for the nine months ended September 30, 2025 was $282,142, down 28.2% from $392,432 in the same period of 2024[32] - General and administrative expenses decreased by 25.4% to $108,721 for the nine months ended September 30, 2025, compared to $145,672 in 2024[26] - Cash paid for interest during the nine months ended September 30, 2025 was $84,002, down 61.2% from $216,757 in 2024[32] - Interest expense for Q3 2024 was $31,379,000, slightly decreasing to $30,021,000 in Q3 2025[38] Shareholder Returns and Stock Activity - The Board of Directors declared a cash dividend of $0.0625 per share, payable on or about November 25, 2025[13] - Select Medical repurchased 6,375,512 shares at a cost of approximately $96.5 million during the nine months ended September 30, 2025[16] Balance Sheet - Total assets increased to $5,685,723 as of September 30, 2025, compared to $5,607,951 at the end of 2024[30] - Total liabilities rose to $3,665,867 as of September 30, 2025, up from $3,610,856 at the end of 2024[30] Operational Metrics - Number of hospitals operated at the end of Q3 2025 was 105, a decrease from 106 in Q3 2024[33] - Revenue per patient day for Q3 2025 increased to $2,287, a 6.6% increase from $2,145 in Q3 2024[33] - Number of admissions in Q3 2025 increased to 8,859, a 2.1% rise from 8,676 in Q3 2024[33] - The number of patients admitted to Select Medical's hospitals during the periods presented is a critical metric for assessing operational performance[35] - The occupancy rate of hospitals is calculated using the number of patient days divided by total bed days available, indicating utilization levels[35] - Average revenue per patient day for the periods presented is calculated by dividing patient service revenues by total patient days, highlighting operational efficiency[35] Tax and Debt - Income tax expense from continuing operations increased by 168.6% to $11,749 in Q3 2025 from $4,374 in Q3 2024[24] - The company reported a loss on early retirement of debt amounting to $10,939 in both the three and nine months ended September 30, 2024[26] - The company reported a loss on early retirement of debt amounting to $10,939,000 for the nine months ended September 30, 2024[38]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 4714 Gettysburg Road, P.O. Box 2034 Mechanicsburg, PA 17055 (Address of Principal Executive Offices and Zip code) (717) 972-1100 (Registrant's telephone number, including area code) Sec ...

Group 1: Select Medical Holdings Corporation (SEM) - Select Medical Holdings Corporation is considered one of the most undervalued small-cap stocks currently available for investment, with a Buy rating and a price target of $21 from Benchmark Co. analyst Bill Sutherland [1] - Bank of America Securities analyst Joanna Gajuk also issued a Buy rating on SEM with a price target of $15, citing the recent delay of the 20% Rule by CMS as a factor that could improve the company's financial outlook for fiscal Q3 2025 [3] - The company operates in medical rehabilitation services, divided into three segments: Critical Illness Recovery Hospital, Rehabilitation Hospital, and Outpatient Rehabilitation [4] Group 2: Market Context and Analyst Insights - RBC Capital raised its price target for QUALCOMM to $20 from $16, maintaining an Outperform rating, indicating that the current stock dislocation presents an attractive entry point for investors [2]