PACS Group Inc (PACS) AI Stock Analysis

• Market Cap: $1.99B
• Dividend Yield: N/A
• Average Volume (3M): 634.48K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.61
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 32,433
• Sector: General
• Sector Strength: N/A
• Industry: Financial - Conglomerates
• EPS (TTM): 0.42
• Shares Outstanding: 155,177,500
• 10 Day Avg. Volume: 596,452
• 30 Day Avg. Volume: 634,479
• PEG Ratio: 0.11
• Price to Book (P/B): 54.26
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 49.51
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $32.00
• Price Target Upside: 150.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 51 Neutral
• Price Target: ―

The overall score for PACS Group Inc is moderate due to strong revenue growth counterbalanced by high financial leverage and negative technical indicators. Regulatory risks from noncompliance with NYSE requirements further impact the score. Limited valuation data and lack of earnings call insights add to the uncertainty surrounding the stock.

Positive Factors

Business Model

PACS has an attractive business model focused on acquiring underperforming skilled nursing facilities and driving improvement in clinical, operational, and financial performance, fueling management’s long-term growth outlook.

Industry Tailwinds

PACS will benefit from industry tailwinds including an aging population, growing chronic conditions among patients, and favorable reimbursement rates.

Market Position

PACS is well-positioned to continue gaining share in a highly fragmented market as the company’s scale and operational execution enable it to better navigate industry headwinds and expand its facility portfolio.

Negative Factors

Industry Challenges

The SNF industry has faced challenges since the pandemic and is slowly recovering, however, there are only a few players in the space (including PACS) that have emerged and that can take advantage of ongoing challenges.

Valuation

The company is valued using EV/EBITDA, with PACS currently trading at a multiple that reflects continued momentum in the business balanced with potential risks.

PACS Group Inc Business Overview & Revenue Model

Company Description

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How the Company Makes Money

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PACS Group Inc Financial Statement Overview

Summary

PACS Group Inc demonstrates robust revenue growth but faces challenges with profitability margins and high leverage. The balance sheet reveals significant debt, posing a potential risk to financial stability, while cash flow generation needs improvement to support long-term investments and reduce leverage.

Income Statement

PACS Group Inc shows a solid revenue growth of 28.46% year-over-year, indicating strong market demand and expansion. However, the net profit margin decreased from 6.21% to 3.63%, pointing to increased costs or operational inefficiencies. The gross profit margin remains relatively stable at 14.36%, suggesting consistent cost management at the gross level. The EBIT and EBITDA margins reflect a strong operational base, though slightly declining year-over-year.

Balance Sheet

The company's balance sheet indicates high leverage with a debt-to-equity ratio of 29.61, which introduces potential financial risk. The equity ratio of 2.74% is low, suggesting heavy reliance on debt financing. The return on equity stands at 117.43%, indicating high returns relative to the equity base, but this is primarily due to the minimal equity compared to liabilities.

Cash Flow

PACS's operating cash flow to net income ratio is 0.56, showing moderate cash generation relative to earnings. The free cash flow decreased significantly by 74.31%, which may impact future investments or debt repayments. However, the company maintains positive free cash flow, indicating some level of financial flexibility.

Breakdown	TTM	Dec 2023	Dec 2022
Income Statement
Total Revenue	1.92B	3.11B	2.42B
Gross Profit	280.73M	447.07M	378.37M
EBITDA	93.44M	232.87M	251.67M
Net Income	38.23M	112.87M	150.50M
Balance Sheet
Total Assets	3.90B	3.51B	2.46B
Cash, Cash Equivalents and Short-Term Investments	73.37M	73.42M	66.12M
Total Debt	2.71B	2.85B	1.93B
Total Liabilities	3.32B	3.41B	2.39B
Stockholders Equity	572.13M	96.13M	63.65M
Cash Flow
Free Cash Flow	67.51M	17.91M	69.75M
Operating Cash Flow	93.60M	63.70M	92.61M
Investing Cash Flow	-239.13M	-172.79M	-72.08M
Financing Cash Flow	104.68M	129.59M	9.10M

PACS Group Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.79
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PACS, the sentiment is Positive. The current price of 12.79 is above the 20-day moving average (MA) of 12.38, above the 50-day MA of 11.11, and below the 200-day MA of 17.23, indicating a neutral trend. The MACD of 0.57 indicates Positive momentum. The RSI at 60.71 is Neutral, neither overbought nor oversold. The STOCH value of 46.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PACS.

PACS Group Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HON	80 Outperform	$153.42B	27.20	33.56%	1.91%	6.30%	0.81%
ITW	77 Outperform	$76.11B	23.07	107.62%	2.31%	-1.85%	12.04%
DHR	72 Outperform	$143.62B	38.91	7.22%	0.62%	-9.19%	-12.75%
GE	64 Neutral	$266.95B	39.39	28.09%	0.57%	-42.92%	109.75%
MMM	63 Neutral	$83.95B	19.87	94.75%	1.86%	-24.93%	―
Sector *	56 Neutral	$5.71B	21.48	-28.61%	5.64%	10.78%	-31.71%
PACS	51 Neutral	$1.99B	―	117.42%	―	―	―

PACS Group Inc Corporate Events

PACS Group Inc Faces NYSE Noncompliance Notice

PACS Group, a major player in post-acute healthcare, has received a noncompliance notice from the NYSE due to the delayed filing of its quarterly report, attributed to an ongoing investigation. The company aims to address this within six months, although uncertainties remain. This highlights the potential risks and challenges faced by companies in maintaining compliance with financial reporting standards.