Pennant Group (PNTG) AI Stock Analysis

• Market Cap: $877.87M
• Dividend Yield: N/A
• Average Volume (3M): 345.13K
• Price to Earnings (P/E): 32.5
• Beta (1Y): 0.78
• Revenue Growth: 30.58%
• EPS Growth: 24.86%
• Country: US
• Employees: 7,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 0.27
• Shares Outstanding: 34,561,985
• 10 Day Avg. Volume: 268,275
• 30 Day Avg. Volume: 345,135
• PEG Ratio: 0.61
• Price to Book (P/B): 2.82
• Price to Sales (P/S): 1.19
• P/FCF Ratio: 27.29
• Enterprise Value/Market Cap: 1.57
• Enterprise Value/Revenue: 1.72
• Enterprise Value/Gross Profit: 12.71
• Enterprise Value/Ebitda: 26.47
• 1Y Price Target: $33.00
• Price Target Upside: 29.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 74 Outperform
• Price Target: $28.00 ▲(10.24% Upside)

Pennant Group's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. While technical indicators show mixed signals, the company's growth prospects and improved guidance provide a cautiously optimistic outlook. Valuation concerns and regulatory challenges are notable risks.

Positive Factors

Revenue Growth

Pennant Group's substantial revenue growth across service lines indicates strong market demand and effective business strategies, supporting long-term expansion.

Strategic Acquisitions

Acquisitions expand Pennant Group's presence in the Southeast U.S., enhancing capacity and positioning for future growth in key markets.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, allowing for reinvestment in growth opportunities and debt reduction, supporting long-term stability.

Negative Factors

Regulatory Challenges

Potential payment reductions from CMS pose a risk to revenue streams, impacting profitability and necessitating strategic adjustments to maintain margins.

High Leverage

Significant leverage could strain financial resources, limiting flexibility and increasing vulnerability to interest rate changes or economic downturns.

Profit Margin Challenges

While margins are improving, they remain relatively low, indicating ongoing challenges in achieving optimal profitability and operational efficiency.

Pennant Group Business Overview & Revenue Model

Company Description

The Pennant Group, Inc. provides healthcare services in the United States. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, and counseling services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, meals, housekeeping, and assistance in the activities of daily living to seniors, who are independent or who require some support. As of December 31, 2021, the company operated 88 home health and hospice agencies, and 54 senior living communities with 4127 Senior Living units in Arizona, California, Colorado, Idaho, Iowa, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho.

How the Company Makes Money

Pennant Group generates revenue through multiple streams within the healthcare services industry. Primarily, it earns money by providing home health services, hospice care, and long-term care services to patients, which are reimbursed through government programs such as Medicare and Medicaid, as well as private insurance providers. The company also benefits from strategic partnerships and affiliations with local healthcare providers and hospitals, which help to drive patient referrals and enhance service offerings. Additionally, Pennant Group may engage in value-based care models that incentivize improved patient outcomes, further contributing to its revenue through performance-based reimbursements.

Pennant Group Financial Statement Overview

Summary

Pennant Group shows strong revenue growth and improved cash flow generation, contributing to a positive financial outlook. However, challenges with relatively low profit margins and high leverage pose risks if not managed carefully.

Income Statement

The income statement shows a solid revenue growth rate of 6.78% TTM, indicating a positive trend in sales. Gross profit margin is stable around 13.5%, and net profit margin has improved to 3.36% TTM. EBIT and EBITDA margins are also showing slight improvements, reflecting better operational efficiency. However, the margins are still relatively low, suggesting room for improvement in profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.00 TTM, indicating significant leverage, though it has improved from previous years. Return on equity is at 9.94% TTM, showing decent profitability relative to equity. The equity ratio is moderate, suggesting a balanced asset structure. While leverage is a concern, the company is managing to improve its equity position.

Cash Flow

Cash flow analysis shows a remarkable free cash flow growth rate of 271.98% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.40 TTM, and the free cash flow to net income ratio is 0.78 TTM, both reflecting healthy cash conversion. The company has significantly improved its cash flow position, enhancing financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	798.92M	695.24M	544.89M	473.24M	439.69M	390.95M
Gross Profit	108.17M	93.76M	67.04M	58.59M	45.74M	54.89M
EBITDA	51.95M	44.44M	30.64M	24.60M	9.46M	23.82M
Net Income	26.82M	22.56M	13.38M	6.64M	2.15M	15.74M
Balance Sheet
Total Assets	751.42M	679.52M	539.69M	512.12M	530.30M	506.98M
Cash, Cash Equivalents and Short-Term Investments	14.38M	24.25M	6.06M	2.08M	5.19M	43.00K
Total Debt	313.45M	273.09M	329.63M	326.57M	355.24M	319.00M
Total Liabilities	417.79M	367.56M	394.18M	386.46M	416.05M	405.80M
Stockholders Equity	313.30M	293.28M	140.34M	121.01M	110.20M	96.58M
Cash Flow
Free Cash Flow	32.42M	30.31M	24.98M	-5.13M	-24.53M	42.95M
Operating Cash Flow	41.68M	39.30M	33.09M	9.04M	-18.22M	50.20M
Investing Cash Flow	-97.76M	-70.68M	-30.22M	-24.24M	-20.12M	-41.62M
Financing Cash Flow	67.42M	49.57M	1.11M	12.08M	43.49M	-8.95M

Pennant Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 25.40
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PNTG, the sentiment is Positive. The current price of 25.4 is above the 20-day moving average (MA) of 24.66, above the 50-day MA of 24.27, and below the 200-day MA of 26.03, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 56.03 is Neutral, neither overbought nor oversold. The STOCH value of 57.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PNTG.

Pennant Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PNTG	74 Outperform	$877.87M	32.48	11.44%	―	30.58%	24.86%
USPH	70 Outperform	1.27B	36.10	6.33%	2.15%	16.24%	116.58%
SEM	69 Neutral	1.57B	11.63	8.21%	2.02%	-16.10%	-48.97%
HCSG	68 Neutral	1.18B	115.62	2.27%	―	5.17%	-65.33%
ASTH	68 Neutral	1.48B	57.50	3.90%	―	51.97%	-64.10%
AMN	54 Neutral	723.18M	-2.43	-49.02%	―	-14.33%	-398.68%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Pennant Group Corporate Events

Pennant Group Reports Strong Q2 2025 Financial Results

The Pennant Group reported its second quarter 2025 financial results, highlighting a significant increase in revenue and earnings compared to the previous year. Total revenue for the quarter was $219.5 million, marking a 30.1% increase, while net income rose by 24.5% to $7.1 million. The company also provided updated guidance for 2025, anticipating total revenue between $852.8 million and $887.6 million, reflecting strong operational momentum and potential growth opportunities, including a transaction with UnitedHealth Group and Amedisys.

The most recent analyst rating on (PNTG) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on Pennant Group stock, see the PNTG Stock Forecast page.