Business ModelPACS possesses an attractive business model centered around acquiring underperforming skilled nursing facilities and capturing embedded earnings through improvements to clinical, operational, and financial performance.
Earnings GrowthPACS's healthy earnings growth trajectory plus a discounted valuation of just ~9.5x EV/EBITDAR allows the resumption of coverage at a Buy rating.
Industry PositioningPACS is well positioned to take advantage of industry tailwinds that include: an aging U.S. population, shifts to lower cost site of care settings, and a fragmented industry that provides ample acquisition opportunities of low performing facilities.