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Pennant Group Inc (PNTG)
NASDAQ:PNTG
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Pennant Group (PNTG) AI Stock Analysis

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PNTG

Pennant Group

(NASDAQ:PNTG)

Rating:64Neutral
Price Target:
$25.00
▲(8.23%Upside)
The overall stock score of 64 reflects strong financial performance and positive earnings call highlights, tempered by bearish technical indicators and high valuation metrics. While the company has demonstrated robust growth and profitability, the technical analysis suggests caution due to current market sentiment and trading conditions.
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 (PNTG) vs. SPDR S&P 500 ETF (SPY)

Pennant Group Business Overview & Revenue Model

Company DescriptionThe Pennant Group, Inc. operates in the healthcare services sector, providing home health, hospice, and senior living services. The company is dedicated to offering compassionate care and comprehensive support to patients and residents in various settings. With a focus on enhancing the quality of life for its clients, Pennant Group operates a network of agencies and facilities across multiple states, delivering personalized care tailored to individual needs.
How the Company Makes MoneyThe Pennant Group generates revenue primarily through its home health, hospice, and senior living services. In the home health and hospice segments, the company earns money by providing skilled nursing, physical therapy, occupational therapy, speech therapy, and medical social services to patients in their homes. These services are typically reimbursed by Medicare, Medicaid, and private insurance companies. In the senior living segment, Pennant Group operates residential communities that offer various levels of care, including independent living, assisted living, and memory care. Revenue in this segment is derived from resident fees, which can vary based on the level of care and services provided. Additionally, the company may engage in strategic partnerships and acquisitions to expand its service offerings and geographic presence, further contributing to its revenue growth.

Pennant Group Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: -13.93%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call indicates strong financial performance and growth across segments, particularly in home health, hospice, and senior living, supported by successful acquisition integrations and leadership development. However, challenges remain with cash flow and labor cost inflation.
Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Revenue of $209.8 million, an increase of $52.9 million or 33.7% over the prior year quarter; consolidated adjusted EBITDA of $16.4 million, an increase of $5.1 million or 45.9% over the prior year quarter; adjusted diluted earnings per share of $0.27, an increase of $0.07 or 35% over the prior year quarter.
Home Health and Hospice Segment Performance
Segment revenue reached $159.9 million, up $43.4 million or 37.2%, and adjusted EBITDA rose to $25.1 million, an increase of $7.3 million or 40.6% over the prior year quarter.
Strong Senior Living Business Performance
Senior Living segment revenue of $50 million increased by $9.5 million or 23.6% over the prior year quarter; adjusted EBITDA of $4.9 million increased by $1.4 million or 40.8%.
Positive Acquisition and Transition Outcomes
Completed the Signature Healthcare transaction, adding several locations across Oregon and successfully integrating operations ahead of schedule.
Leadership Development Success
Since January of last year, 52 local leaders earned C-level designations, including 19 local CEOs.
Negative Updates
Cash Flow Challenges
Cash flows used in operations were $21.2 million, a decrease of operating cash flow of $21.8 million compared to the prior year quarter due to significant acquisitions and accrual timing.
Elevated Labor Cost Inflation
On the senior living side, labor cost inflation was just under 5%, while home health and hospice saw a more normalized rate of 3.2%.
Company Guidance
During The Pennant Group's first quarter 2025 earnings call, the company reported record-breaking results with revenues reaching $209.8 million, representing a 33.7% increase from the previous year. Consolidated adjusted EBITDA was $16.4 million, a 45.9% rise, and adjusted diluted earnings per share were $0.27, up by 35%. The Home Health and Hospice segment achieved $159.9 million in revenue, a 37.2% increase, and an adjusted EBITDA of $25.1 million, marking a 40.6% rise. Hospice admissions grew by 22.8%, and the average daily census increased by 28.1%. Meanwhile, the Senior Living segment saw a revenue of $50 million, a 23.6% increase, with an adjusted EBITDA of $4.9 million, up by 40.8%. The company also reported strong operational cash flow expectations for 2025, ranging between $35 million and $45 million. The guidance for the year anticipates revenues of $800 million to $865 million, adjusted EBITDA between $63.1 million and $68.2 million, and adjusted EPS from $1.03 to $1.11.

Pennant Group Financial Statement Overview

Summary
Pennant Group shows strong revenue growth and improved profitability. However, a moderate level of leverage is present, which requires careful management. Cash flow generation is stable but could improve in consistency.
Income Statement
75
Positive
The company has shown consistent revenue growth with a TTM (Trailing-Twelve-Months) revenue of $748.17M, up from $695.24M in 2024. Gross profit margin remains stable at 13.27% in TTM, demonstrating operational efficiency. The net profit margin improved to 3.40% in TTM, indicating better profitability. Both EBIT and EBITDA margins have shown improvement, reflecting enhanced earnings before interest and taxes, and before interest, taxes, depreciation, and amortization.
Balance Sheet
70
Positive
The debt-to-equity ratio stands at 1.10, reflecting a moderate level of leverage. Return on equity improved to 8.38% in TTM, indicating better returns for shareholders. The equity ratio is 40.82%, suggesting a stable capital structure with a good proportion of equity funding. However, the high level of debt may pose potential risks.
Cash Flow
65
Positive
Operating cash flow to net income ratio is 0.69, indicating positive cash conversion from net income. Free cash flow to net income ratio is 0.34, showing some capacity for reinvestment and debt servicing. Free cash flow growth has been volatile, with the latest TTM showing a decrease compared to the previous period. Overall, cash flow management appears moderate with room for improvement.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue695.24M544.89M473.24M439.69M390.95M
Gross Profit93.76M67.04M58.59M45.74M54.89M
EBITDA44.44M30.64M24.60M9.46M23.82M
Net Income22.56M13.38M6.64M2.15M15.74M
Balance Sheet
Total Assets679.52M539.69M512.12M530.30M506.98M
Cash, Cash Equivalents and Short-Term Investments24.25M6.06M2.08M5.19M43.00K
Total Debt273.09M329.63M326.57M355.24M319.00M
Total Liabilities367.56M394.18M386.46M416.05M405.80M
Stockholders Equity293.28M140.34M121.01M110.20M96.58M
Cash Flow
Free Cash Flow30.31M24.98M-5.13M-24.53M42.95M
Operating Cash Flow39.30M33.09M9.04M-18.22M50.20M
Investing Cash Flow-70.68M-30.22M-24.24M-20.12M-41.62M
Financing Cash Flow49.57M1.11M12.08M43.49M-8.95M

Pennant Group Technical Analysis

Technical Analysis Sentiment
Negative
Last Price23.10
Price Trends
50DMA
27.27
Negative
100DMA
26.21
Negative
200DMA
27.83
Negative
Market Momentum
MACD
-1.28
Positive
RSI
33.83
Neutral
STOCH
28.17
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 23.1 is below the 20-day moving average (MA) of 25.20, below the 50-day MA of 27.27, and below the 200-day MA of 27.83, indicating a bearish trend. The MACD of -1.28 indicates Positive momentum. The RSI at 33.83 is Neutral, neither overbought nor oversold. The STOCH value of 28.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PNTG.

Pennant Group Risk Analysis

Pennant Group disclosed 41 risk factors in its most recent earnings report. Pennant Group reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Pennant Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (70)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
70
Outperform
$1.13B34.206.72%2.40%14.30%76.89%
70
Neutral
€3.53B24.1522.76%2.40%32.58%18.20%
67
Neutral
$994.61M96.402.28%5.17%-65.33%
64
Neutral
$796.23M30.1411.28%30.04%43.47%
52
Neutral
$462.58M-70.23%26.13%37.38%
51
Neutral
$1.74B-91.17%3.88%-34.30%
45
Neutral
$768.67M226.4442.49%9.05%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PNTG
Pennant Group
23.35
-5.96
-20.33%
BKD
Brookdale Senior Living
7.51
-0.48
-6.01%
SNDA
Sonida Senior Living
24.44
-7.76
-24.10%
HCSG
Healthcare Services
13.25
1.90
16.74%
USPH
US Physical Therapy
74.25
-21.92
-22.79%
AVAH
Aveanna Healthcare Holdings
3.96
-0.43
-9.79%

Pennant Group Corporate Events

Executive/Board ChangesShareholder Meetings
Pennant Group Holds Annual Stockholders Meeting
Neutral
May 20, 2025

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.

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.

Business Operations and StrategyFinancial Disclosures
Pennant Group Reports Strong Q1 2025 Financial Results
Positive
May 6, 2025

On May 6, 2025, The Pennant Group, Inc. announced its first quarter 2025 financial results, reporting a significant increase in earnings and revenue compared to the previous year. The company achieved a GAAP diluted earnings per share of $0.22 and an adjusted diluted earnings per share of $0.27. Total revenue for the quarter reached $209.8 million, marking a 33.7% increase, while net income rose by 58.5% to $7.8 million. The home health and hospice services segment saw a 37.2% revenue increase, and the senior living services segment experienced a 23.6% revenue growth. The company attributes its strong performance to ongoing investments in leadership development and strategic acquisitions, which have driven record operational results.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 22, 2025