Last Updated: 10 Nov 2024
Executive Summary
Select Medical Holdings (SEM) is a leading provider of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States. The company has a strong financial position with a market capitalization of $5.07 billion, EBITDA of $819.28 million, and EPS of $2.18. SEM's trailing PE ratio of 18.01 is in line with industry peers. The company's quarterly earnings and revenue growth rates are positive, indicating a healthy business outlook.
Company Overview
Select Medical Holdings was founded in 1997 and is headquartered in Mechanicsburg, Pennsylvania. The company operates a network of over 1,000 locations across the United States. SEM provides a wide range of healthcare services, including:
Critical illness recovery
Rehabilitation
Outpatient rehabilitation
Occupational health
The company's target market is patients who require specialized care after an acute illness or injury. SEM has a strong reputation for providing high-quality care and has been recognized by several organizations for its clinical excellence.
Fundamental Analysis
SEM's financial performance has been solid in recent years. The company's revenue has grown from $6.1 billion in 2020 to $6.97 billion in 2023. Net income has also increased from $457.7 million in 2020 to $530.6 million in 2023. SEM's profit margin is 3.97%, which is slightly below the industry average. However, the company's operating margin of 8.01% is above the industry average.
SEM has a strong balance sheet with $1.6 billion in cash and equivalents and $2.2 billion in total debt. The company's debt-to-equity ratio of 0.58 is manageable. SEM's return on assets (ROA) is 4.84% and its return on equity (ROE) is 18.4%. These ratios are both above the industry average.
Technical Analysis
SEM's stock price has been trading in a range between $21.18 and $40.35 over the past 52 weeks. The stock is currently trading at $39.27, which is near the upper end of its trading range. The stock's 50-day moving average is $34.41 and its 200-day moving average is $32.31. The stock's relative strength index (RSI) is 58.37, which indicates that the stock is overbought.
Short Term Outlook
SEM's stock price is expected to continue to trade in a range in the short term. The stock's RSI is overbought, which suggests that a pullback could be in order. However, the stock's moving averages are both trending higher, which indicates that the stock is in an uptrend.
Long Term Outlook
SEM's long-term outlook is positive. The company has a strong financial position and a growing business. The company's aging population is expected to drive demand for healthcare services, which should benefit SEM.
Analyst Recommendations
Analysts are generally positive on SEM. The average analyst rating is "buy" and the average analyst target price is $45.40.
Conclusion
Select Medical Holdings is a leading provider of healthcare services in the United States. The company has a strong financial position and a growing business. SEM's stock price is expected to continue to trade in a range in the short term, but the long-term outlook is positive.
