Pennant Group (PNTG) AI Stock Analysis

• Market Cap: $1.03B
• Dividend Yield: N/A
• Average Volume (3M): 307.75K
• Price to Earnings (P/E): 38.8
• Beta (1Y): 0.71
• Revenue Growth: 29.89%
• EPS Growth: 10.33%
• Country: US
• Employees: 7,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 0.30
• Shares Outstanding: 34,593,720
• 10 Day Avg. Volume: 258,840
• 30 Day Avg. Volume: 307,745
• 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: 1.18
• Enterprise Value/Revenue: 1.43
• Enterprise Value/Gross Profit: 9.26
• Enterprise Value/Ebitda: 23.27
• 1Y Price Target: $36.20
• Price Target Upside: 23.17% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $33.00 ▲(12.28% Upside)

Pennant Group's strong earnings performance and technical momentum are the primary drivers of its score. While the financial performance is positive, the high valuation and leverage are concerns. The positive sentiment from the earnings call and successful acquisitions further bolster the score.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for services and effective business strategies, enhancing long-term market positioning.

Strategic Acquisition

The acquisition expands market reach and operational capabilities, providing a significant growth opportunity in new geographic areas.

Cash Flow Improvement

Improved cash flow enhances financial flexibility, supporting growth initiatives and providing a buffer against economic uncertainties.

Negative Factors

High Debt Levels

High leverage can strain financial resources and limit strategic options, posing risks to long-term financial stability.

Regulatory Challenges

Regulatory changes may reduce reimbursement rates, impacting revenue and profitability in the home health segment.

Integration Challenges

Integration issues can disrupt operations and delay realization of acquisition benefits, affecting short to medium-term performance.

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, primarily from its home health and hospice services as well as its senior living facilities. The company earns money by billing for medical services provided to patients, including skilled nursing, physical therapy, and other rehabilitative services. Revenue is supplemented through government programs such as Medicare and Medicaid, which reimburse providers for eligible healthcare services. Additionally, the company may have partnerships with hospitals and healthcare systems that refer patients to its facilities, thereby creating a steady flow of clients. Furthermore, the company focuses on operational efficiencies and improving patient outcomes, which can lead to higher reimbursement rates and increased revenue.

Pennant Group Financial Statement Overview

Summary

Pennant Group shows consistent revenue and profit growth, with improvements in cash flow and profitability metrics. However, high leverage remains a concern, though it is improving.

Income Statement

Pennant Group has demonstrated consistent revenue growth, with a notable 6.05% increase in TTM. Gross profit margin has slightly improved to 13.54%, indicating stable cost management. Net profit margin is modest at 3.36%, but shows improvement over previous years. EBIT and EBITDA margins are stable, reflecting efficient operations. Overall, the income statement reflects positive growth trends and improving profitability.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 1.00 in TTM, indicating significant leverage, though it has improved from previous years. Return on equity is reasonable at 9.94%, suggesting effective use of equity. The equity ratio is moderate, reflecting a balanced asset structure. While leverage remains a concern, the company is showing signs of improving financial stability.

Cash Flow

Operating cash flow has increased, with a TTM coverage ratio of 0.40, indicating better cash generation relative to net income. Free cash flow growth is strong at 11.35%, and the free cash flow to net income ratio is healthy at 0.78. This suggests that the company is effectively converting its earnings into cash, supporting its financial flexibility and growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	847.27M	695.24M	544.89M	473.24M	439.69M	390.95M
Gross Profit	130.85M	93.76M	67.04M	58.59M	48.59M	54.89M
EBITDA	52.04M	44.44M	30.64M	17.61M	9.46M	23.82M
Net Income	26.70M	22.56M	13.38M	6.64M	2.70M	15.74M
Balance Sheet
Total Assets	753.64M	679.52M	539.69M	512.12M	530.30M	506.98M
Cash, Cash Equivalents and Short-Term Investments	2.34M	24.25M	6.06M	2.08M	5.19M	43.00K
Total Debt	302.81M	273.09M	329.63M	326.57M	355.24M	319.00M
Total Liabilities	410.60M	367.56M	394.18M	386.46M	416.05M	405.80M
Stockholders Equity	321.91M	293.28M	140.34M	121.01M	110.20M	96.58M
Cash Flow
Free Cash Flow	36.10M	30.31M	24.98M	-5.13M	-24.53M	42.95M
Operating Cash Flow	47.91M	39.30M	33.09M	9.04M	-18.22M	50.20M
Investing Cash Flow	-79.35M	-70.68M	-30.22M	-24.24M	-20.12M	-41.62M
Financing Cash Flow	29.31M	49.57M	1.11M	12.08M	43.49M	-8.95M

Pennant Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 29.39 is above the 20-day moving average (MA) of 28.29, above the 50-day MA of 26.17, and above the 200-day MA of 25.79, indicating a bullish trend. The MACD of 1.07 indicates Negative momentum. The RSI at 71.08 is Negative, neither overbought nor oversold. The STOCH value of 68.94 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	73 Outperform	$1.03B	38.85	10.87%	―	29.89%	10.33%
HCSG	72 Outperform	$1.34B	35.42	8.07%	―	6.26%	-19.33%
SEM	70 Outperform	$1.89B	17.53	5.57%	1.64%	-22.96%	-59.35%
USPH	63 Neutral	$1.19B	33.02	7.30%	2.29%	17.50%	154.28%
ASTH	56 Neutral	$1.12B	119.16	1.29%	―	68.17%	-85.42%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
AMN	50 Neutral	$607.71M	-2.26	-35.90%	―	-11.42%	-617.31%

Pennant Group Corporate Events

Pennant Group Expands Credit Facility by $100 Million

On November 3, 2025, The Pennant Group, Inc. expanded its credit facility by $100 million, bringing the total to $350 million, through a First Amendment with Truist Bank and other lenders. This expansion, which retains the same interest rate and maturity date as the existing facility, aims to refinance part of the outstanding revolving loans and support future growth initiatives, enhancing the company’s financial flexibility and strategic opportunities.

Pennant Group Reports Q3 2025 Revenue Surge

On November 5, 2025, The Pennant Group announced its third-quarter 2025 financial results, highlighting a 26.8% increase in total revenue to $229 million compared to the previous year. The company reported a GAAP diluted earnings per share of $0.17 and an adjusted earnings per share of $0.30. Notably, the company completed a significant acquisition of 54 operations from UnitedHealth Group and Amedisys on October 1, 2025, marking its largest transaction to date. This expansion into the Southeast is expected to enhance Pennant’s market presence and operational capabilities.

Pennant Group Expands with Strategic Acquisition in Southeast

On October 1, 2025, The Pennant Group, Inc. completed the acquisition of certain home health, hospice, and personal care operations from UnitedHealth Group and Amedisys, Inc. for $146.5 million. This strategic acquisition, part of an antitrust settlement, expands Pennant’s presence into Tennessee, Georgia, and Alabama, marking a significant growth opportunity in the Southeast U.S. The transition is supported by a services agreement with UnitedHealth, and Pennant aims to leverage its operational excellence to integrate these new locations into its portfolio.

Pennant Group Amends Purchase Agreement with UnitedHealth

On October 1, 2025, The Pennant Group, Inc. and its subsidiaries amended a purchase agreement with UnitedHealth Group and Amedisys to acquire additional equity interests and assets related to home health, hospice, and palliative care services. The amendment increased the purchase price from $102,484,000 to $146,531,160 to reflect the acquisition of additional assets and entities, impacting the company’s operational scope and market positioning.