Core Viewpoint - Select Medical Holdings Corporation (SEM) has experienced a significant share price increase of 50.2% year-to-date, outperforming the industry and the S&P 500 Index, but faces challenges that may impact future performance [1]. Group 1: Stock Performance - SEM's stock is currently trading at $35.30, nearing the upper end of its 52-week range of $21.28 to $40.50 [1]. - The stock is trading below its 50-day moving average, indicating potential downward momentum [2]. Group 2: Financial Performance and Costs - Rising costs and expenses have negatively impacted SEM's profitability, with costs increasing by 11.5% in 2021, 5.8% in 2022, and 2.5% in 2023, and a further 5.6% rise in the first half of 2024 [3]. - A projected year-over-year rise of over 4% in overall costs for the current year is expected to pressure profit margins [3]. Group 3: Capital Efficiency and Leverage - SEM's return on invested capital is 6.1%, which is below the industry average of 10.6%, indicating less efficient capital utilization [4]. - The company's net debt-to-capital ratio is 67%, significantly higher than the industry average of 21.7%, with long-term debt totaling $3.6 billion and cash and cash equivalents at $111.2 million as of June 30, 2024 [5]. Group 4: Valuation and Earnings Estimates - SEM is trading at a forward 12-month price-to-earnings multiple of 16.21X, higher than its five-year median of 12.99X and close to the industry's average of 16.59X, suggesting limited growth potential [6]. - The Zacks Consensus Estimate for SEM's current-quarter adjusted earnings is 41 cents per share, reflecting a 10.9% year-over-year decline, with a further 13.9% decline projected for the next quarter [6]. Group 5: Growth Opportunities - Despite rising costs, increasing admissions and patient days are expected to drive revenue growth, particularly in the Rehabilitation Hospital unit [7]. - SEM plans to add 449 additional beds by 2026 to meet rising demand and boost volumes [7]. Group 6: Market Sentiment - The negative sentiment surrounding SEM is evident, with earnings per share estimates declining, leading to caution among investors [8].

MECHANICSBURG, Pa., Sept. 4, 2024 /PRNewswire/ -- Select Medical Corporation ("Select Medical") today announced the signing of a definitive agreement to purchase Valir Rehabilitation Hospital, a 50-bed inpatient rehabilitation facility in Oklahoma City, from Valir Health. Financial terms of the deal were not disclosed. "We are excited to bring best-in-class inpatient rehabilitative care to meet the demands of the growing Oklahoma City population," said Tom Mullin, president of Select Medical. "We are alread ...

Core Viewpoint - Select Medical Holdings Corporation (SEM) experienced a 16.9% decline in stock price following the release of its second-quarter 2024 results, despite beating earnings estimates due to improved patient days in certain units. Concerns arose regarding elevated expenses and declining visits in the Concentra unit [1] Financial Performance - SEM reported adjusted earnings per share (EPS) of 60 cents, exceeding the Zacks Consensus Estimate by 1.7%, although this represented a 1.6% decline year over year [2] - Net operating revenues reached $1.8 billion, reflecting a 5.1% year-over-year increase and surpassing the consensus mark by 1.6% [2] - Total costs and expenses rose 5.7% year over year to $1.6 billion, exceeding estimates due to increased service costs and rising administrative expenses [3] - Adjusted EBITDA was $226.3 million, a 3.1% year-over-year increase, outperforming the Zacks Consensus Estimate of $222 million [3] Segmental Update - **Critical Illness Recovery Hospital**: Revenues were $604.9 million, a 5.2% year-over-year increase, but fell short of the consensus estimate. Revenue per patient day increased by 4%, while patient days improved by 1% [4] - **Rehabilitation Hospital**: Revenues grew 11.2% year over year to $267.8 million, exceeding the consensus mark. Adjusted EBITDA rose 13.3% year over year to $62 million [6] - **Outpatient Rehabilitation**: Revenues reached $315.5 million, a 4.1% year-over-year increase, driven by a 3.9% rise in patient visits. Adjusted EBITDA declined 12.4% year over year to $28.8 million [7] - **Concentra**: Revenues were $477.9 million, a 2.3% year-over-year increase, benefiting from a 4.5% growth in revenue per visit despite a 1.6% decline in visits [8] Financial Position - As of June 30, 2024, SEM had cash and cash equivalents of $111.2 million, up from $84 million at the end of 2023. Total assets increased to $7.9 billion from $7.7 billion [10] - Long-term debt was $3.6 billion, slightly up from the end of 2023, while total equity rose to $1.7 billion from $1.5 billion [10] Cash Flow and Shareholder Returns - Cash flow from operations was $278.2 million, an 18.4% year-over-year increase [11] - No share repurchases occurred in Q2 2024 under the $1 billion program, which is set to expire on December 31, 2025. A cash dividend of 12.5 cents per share was approved for payment on August 30, 2024 [12] IPO and Future Outlook - The Concentra unit completed its IPO on July 26, 2024, pricing 22.5 million shares at $23.50 each. SEM retains 82% of Concentra's shares and plans to distribute its remaining interest within 12 months [13] - Management reaffirmed revenue guidance for 2024 between $6.9 billion and $7.1 billion, suggesting a 4.5% growth from 2023. Adjusted EBITDA is expected between $845 million and $885 million, indicating a 7.1% rise from 2023 [14][15]

Select Medical (SEM) came out with quarterly earnings of $0.60 per share, beating the Zacks Consensus Estimate of $0.59 per share. This compares to earnings of $0.61 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 1.69%. A quarter ago, it was expected that this hospital and rehabilitation center operator would post earnings of $0.55 per share when it actually produced earnings of $0.77, delivering a surprise of 40%. Over the ...

MECHANICSBURG, Pa., Aug. 1, 2024 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced results for its second quarter ended June 30, 2024, and the declaration of a cash dividend. For the second quarter ended June 30, 2024, revenue increased 5.1% to $1,759.7 million, compared to $1,674.5 million for the same quarter, prior year. Income from operations was $157.8 million for the second quarter ended June 30, 2024, compared to $159.2 million fo ...

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks. We should also highlight that SEM has a P/B ratio of 3.12. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. SEM's current P/B looks attractive when compar ...

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After the completion of the IPO, Select Medical will own 104,093,503 shares of Concentra's common stock, representing 82.23% of the total outstanding shares of Concentra's common stock (or 80.09% if the underwriters exercise in full their over-allotment option). Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States based on number of facilities. Select Medical's ...

MECHANICSBURG, Pa., July 12, 2024 /PRNewswire/ -- Select Medical Holdings Corporation ("Select Medical," "we," "us," or "our") (NYSE: SEM) today announced an estimate of certain financial results of its wholly-owned subsidiary, Concentra Group Holdings Parent, Inc. ("Concentra"), for the second quarter ended June 30, 2024 in advance of the announcement of Select Medical's actual results, which is expected to occur after market close on Thursday, August 1, 2024. The expectations regarding Concentra's financi ...