Pennant Group (PNTG) AI Stock Analysis

• Market Cap: $832.25M
• Dividend Yield: N/A
• Average Volume (3M): 405.43K
• Price to Earnings (P/E): 31.1
• Beta (1Y): 0.78
• Revenue Growth: 30.58%
• EPS Growth: 24.86%
• Country: US
• Employees: 7,000
• Sector: Healthcare
• Sector Strength: 51
• Industry: Medical - Care Facilities
• EPS (TTM): 0.27
• Shares Outstanding: 34,561,985
• 10 Day Avg. Volume: 369,143
• 30 Day Avg. Volume: 405,430
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.65
• Enterprise Value/Revenue: 1.72
• Enterprise Value/Gross Profit: 12.71
• Enterprise Value/Ebitda: 26.47
• 1Y Price Target: $33.00
• Price Target Upside: 35.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 71 Outperform
• Price Target: $27.00 ▲(11.16% Upside)

The overall stock score is primarily driven by strong financial performance and positive earnings call outcomes, indicating growth potential. However, high leverage and valuation concerns, along with regulatory challenges, temper the outlook.

Positive Factors

Acquisition Progress

Signature integration appears to be going well, and PNTG has seen strong retention of clinical staff.

Financial Performance

Strong Q1 across segments, with Home Health & Hospice outperformance more notable.

M&A Integration

Increasing estimates based on Q1 performance, high-end of guidance commentary and positive update on Signature integration process.

Negative Factors

Cash Flow Concerns

Operating cash flow did not meet expectations, highlighting potential challenges in financial management post-acquisition.

Operating Cash Flow

Q1 operating cash flow was below estimates, however company cited weakness was a function of acquisitions and timing rather than poor cash collection.

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 demonstrates strong revenue growth and improved cash flow generation, contributing to a positive financial outlook. However, the company faces challenges with relatively low profit margins and high leverage, which could 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: Negative
• Last Price: 24.29
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PNTG, the sentiment is Negative. The current price of 24.29 is below the 20-day moving average (MA) of 24.94, below the 50-day MA of 24.81, and below the 200-day MA of 26.53, indicating a bearish trend. The MACD of -0.11 indicates Positive momentum. The RSI at 45.87 is Neutral, neither overbought nor oversold. The STOCH value of 30.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PNTG.

Pennant Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PNTG	71 Outperform	$832.25M	31.06	11.44%	―	30.58%	24.86%
USPH	71 Outperform	$1.30B	37.54	7.02%	2.09%	16.24%	116.58%
HCSG	68 Neutral	$1.14B	111.87	2.28%	―	5.17%	-65.33%
AVAH	59 Neutral	$1.69B	109.31	42.49%	―	11.53%	―
Sector *	51 Neutral	$7.92B	-0.43	-41.67%	2.21%	22.29%	-1.85%
SNDA	51 Neutral	$486.20M	―	-53.33%	―	31.37%	34.94%
BKD	46 Neutral	$1.82B	―	-108.91%	―	3.99%	-14.74%

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.

Pennant Group Holds Annual Stockholders Meeting

On May 16, 2025, The Pennant Group, Inc. held its Annual Meeting of Stockholders, with 28,085,566 shares present either in person or by proxy. During the meeting, significant decisions were made, including the election of Stephen M.R. Covey and Suzanne D. Snapper as Class III directors, approval of an amendment to the certificate of incorporation, and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for 2025. Additionally, the Amended and Restated 2019 Omnibus Incentive Plan was approved, and the compensation for the company’s executive officers received advisory approval.