EAGLE, Idaho, Oct. 02, 2025 (GLOBE NEWSWIRE) -- The Pennant Group, Inc. (NASDAQ: PNTG), the parent company of the Pennant group of affiliated home health, hospice, home care and senior living companies, announced today that on October 1, 2025, it acquired certain operations from UnitedHealth Group Incorporated (“UnitedHealth”). The operations were divested pursuant to UnitedHealth’s and Amedisys Inc.’s (“Amedisys”) antitrust settlement with the United States Justice Department. Pennant is purchasing diveste ...

Company Overview - Enhabit operates nationally across 34 states with approximately 10,600 employees[5] - As of June 30, 2025, Enhabit has 249 Home Health locations and 114 Hospice locations[6] - As of June 30, 2025, 108 Hospice locations are co-located with Home Health locations[7] Industry Trends and Advocacy - The 2028 Medicare skilled home health expenditures are projected to be approximately $41 billion[9] - The 2028 Medicare Hospice expenditures are projected to be approximately $32 billion[9] - Without home health access, mortality rate increases by 41%[19] - Without home health access, episodes with readmissions increase by 34%[19] - Without home health access, episodes with emergency room visits increase 16%[19] - Without home health access, total cost of care increases by approximately $2,500[19] Financial Performance and Debt Management - Home health non-Medicare admissions increased 5.2%[38] - Hospice average daily census grew 12.3% year over year[38] - Since Q1 2024, bank debt has been reduced by $70 million[39] - Leverage ratio decreased from Q4 2023, largely due to $75 million in bank debt reduction during this period[28]

Company Overview - Amedisys Inc. provides home health and hospice services across the U.S., catering to the growing chronic, co-morbid, and aging population [13] - The company offers clinically focused programs for chronic conditions such as diabetes and coronary artery disease, along with various rehabilitative programs [13] Zacks Rank and Style Scores - Amedisys holds a Zacks Rank of 3 (Hold) and has a VGM Score of A, indicating a strong overall rating [14] - The Value Style Score for Amedisys is B, supported by attractive valuation metrics, including a forward P/E ratio of 19.74 [14] - Recent upward revisions in earnings estimates by three analysts have increased the Zacks Consensus Estimate by $0.09 to $5.00 per share for fiscal 2025 [14] Investment Potential - Amedisys is highlighted as a stock to watch due to its solid Zacks Rank and top-tier Value and VGM Style Scores, making it a candidate for investors' short lists [15]

Core Viewpoint - Enhabit (EHAB) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade for Enhabit suggests an improvement in its underlying business, which could lead to increased stock prices as investors respond positively [5][10]. - For the fiscal year ending December 2025, Enhabit is expected to earn $0.44 per share, with the Zacks Consensus Estimate having increased by 18% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Enhabit’s upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9][10].

Core Insights - Amedisys is expected to benefit from valuable partnerships and acquisitions that will generate significant synergies in the upcoming quarters, while facing challenges from a dull macroeconomic environment and competitive pressures [2][4][6] Company Performance - Amedisys shares have increased by 5.9% over the past year, outperforming the industry growth of 3.4% and the S&P 500's growth of 11% [3] - The company has a market capitalization of $3.18 billion and an earnings yield of 5.1%, which is higher than the industry's 4.2% [3] Strategic Initiatives - Amedisys is expanding its business through strategic partnerships and acquisitions, including participation in a new Medicare alternative payment model aimed at supporting dementia patients [4] - The company has introduced advanced molecular testing in collaboration with Patient Choice Laboratories to enhance diagnostic accuracy and speed [4] Clinical Quality - Amedisys has achieved an average Quality of Patient Care star rating of 4.18, with 88% of its care centers receiving 4 stars or higher, and 11 centers achieving a perfect 5-star rating [5][7] - The Patient Satisfaction star average stands at 4.02, exceeding the industry average [5] Market Challenges - The company faces macroeconomic pressures, including high labor costs due to inflation, which are expected to persist through 2025 [6] - Amedisys operates in a fragmented market with intense competition from local and hospital-owned providers, impacting its growth potential [8] Financial Estimates - The Zacks Consensus Estimate for Amedisys' 2025 earnings per share has decreased by 0.4% to $4.90, while the revenue estimate is projected at $2.46 billion, reflecting a 4.6% increase from the previous year [9]

Q1 2025 Highlights - Home health census showed sequential growth, exiting Q1 above the prior year quarter[12] - Hospice maintained monthly sequential Average Daily Census (ADC) growth for 14 consecutive months[12] - The company reduced its leverage ratio by 0.9x since Q1 2024, falling below 4.5x, ahead of the credit agreement requirement[12] Volume Trends - Home health total admissions decreased by 0.8% from Q1 2024 to Q1 2025[17] - Hospice ADC increased by 8.1% from Q1 2024 to Q1 2025[17] - Home health ADC increased by 2.1% from Q1 2024 to Q1 2025[17] Financial Performance - Home Health Adjusted EBITDA Margin was 17.7% in Q1 2025[19] - The company's net debt to adjusted EBITDA leverage ratio decreased by 0.9 from FY 2023 to Q1 2025[19] - Home Health Medicare revenue as a percentage of segment revenue is declining, with a Q1 2025 value of 55.7%[19] Industry Outlook - The aging population is expected to grow, with a 5% expected annual growth in the target population over the next three years[22] - Home health care is presented as a cost-efficient alternative, with an average Medicare cost per day of $63, compared to $556 for skilled nursing facilities[22]

Financial Performance - Total net service revenue decreased by 10% year-over-year, from $2624 million in Q1 2024 to $2599 million in Q1 2025[20] - Hospice net service revenue increased by 205% year-over-year, reaching $593 million in Q1 2025 compared to $492 million in Q1 2024[20] - Adjusted EBITDA increased by 51% year-over-year, from $253 million in Q1 2024 to $266 million in Q1 2025[20] - Net income attributable to Enhabit, Inc increased significantly by 8,8000%, reaching $178 million in Q1 2025, compared to $02 million in Q1 2024[20] - Adjusted diluted EPS increased by 429%, from $007 in Q1 2024 to $010 in Q1 2025[20] Home Health Segment - Home health net service revenue decreased by 59% year-over-year, from $2132 million to $2006 million[20] - Non-Medicare admissions increased by 74% year-over-year[18] - Cost per patient day decreased by 24% year-over-year[19] Hospice Segment - Hospice average daily census increased by 123% year-over-year[18] - Hospice revenue increased $101 million or 205% year over year[37] - Adjusted EBITDA increased 648% year over year[19]

Core Viewpoint - Enhabit (EHAB) is showing solid improvement in earnings estimates, which may lead to continued short-term price momentum and a positive earnings outlook [1][2]. Estimate Revisions - The upward trend in earnings estimate revisions reflects growing analyst optimism regarding Enhabit's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, the earnings estimate is $0.07 per share, unchanged from the previous year, with a Zacks Consensus Estimate increase of 18.18% over the last 30 days due to one upward revision [4]. - For the full year, Enhabit is expected to earn $0.37 per share, representing a 76.19% increase from the prior year, with a 26.14% increase in consensus estimates driven by three upward revisions [5]. Zacks Rank - Enhabit currently holds a Zacks Rank 2 (Buy), indicating promising estimate revisions and a strong potential for outperformance compared to the S&P 500 [6]. - The Zacks Rank system has a proven track record, with Zacks 1 (Strong Buy) stocks averaging a +25% annual return since 2008 [3]. Stock Performance - Enhabit has experienced a 6.4% gain over the past four weeks, driven by solid estimate revisions, suggesting that its earnings growth prospects may lead to further stock price increases [7].