Pennant Group (PNTG) AI Stock Analysis

• Market Cap: $1.17B
• Dividend Yield: N/A
• Average Volume (3M): 307.75K
• Price to Earnings (P/E): 40.3
• Beta (1Y): 0.72
• Revenue Growth: 29.89%
• EPS Growth: 10.33%
• Country: US
• Employees: 7,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 0.34
• Shares Outstanding: 34,663,116
• 10 Day Avg. Volume: 258,840
• 30 Day Avg. Volume: 307,745
• PEG Ratio: 1.69
• Price to Book (P/B): 2.93
• Price to Sales (P/S): 1.03
• P/FCF Ratio: 20.15
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: 1.70
• Enterprise Value/Gross Profit: 11.25
• Enterprise Value/Ebitda: 26.50
• 1Y Price Target: $38.00
• Price Target Upside: 12.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 1.31
• Revenue Forecast (FY): $1.16B

• Rating: 72 Outperform
• Price Target: $37.00 ▲(9.76% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is driven primarily by improving financial performance (strong revenue and cash flow trajectory) and a constructive earnings outlook with robust 2026 growth guidance. Technicals are supportive with clear upward trend signals, while the overall rating is held back by a high P/E valuation and noted integration/reimbursement execution risks.

Positive Factors

Revenue & Cash Flow Strength

Sustained multi-year revenue growth and materially improved operating and free cash flow demonstrate core business scalability across home health, hospice and senior living. Positive cash generation supports reinvestment, debt servicing and strategic M&A without relying solely on equity issuance, improving long-term financial flexibility.

High Clinical Quality Metrics

Above-average CMS ratings and hospice quality scores indicate durable clinical differentiation that supports referrals, payer confidence and pricing leverage. Strong outcomes reduce avoidable hospitalizations and readmissions, improving episode economics and making patient mix and reimbursement more sustainable over time.

Scale via Strategic M&A

Repeatable deal execution and targeted acquisitions expand geographic footprint and diversify revenue streams, enabling fixed-cost absorption and cross-selling. If integrated well, scale can drive higher RevPOR, occupancy gains and margin expansion while creating barriers to entry in regional markets.

Negative Factors

Elevated and Rising Leverage

Increased debt after large acquisitions raises financial risk given healthcare operations' sensitivity to reimbursement and occupancy cycles. Operating cash flow coverage of debt remains modest (~0.33), meaning any sustained revenue or margin pressure could constrain liquidity and limit capital flexibility for future investments.

Integration & Execution Risk

Large-scale integrations require systems, staffing and process alignment; near-term operational disruptions can depress admissions, collections and margins. Persistent integration drag could delay expected synergies and increase G&A and transition costs, pressuring multi-quarter profitability and cash conversion.

Home Health Reimbursement Pressure

Structural reimbursement headwinds in home health compress revenue per episode and weight on margins, requiring continual efficiency gains to sustain profitability. Given material Medicare/Medicaid exposure, adverse rate trends or policy changes could persistently limit margin expansion and reduce free cash flow resilience.

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

Strong multi-year trajectory with consistent revenue growth and materially improved cash generation (FY2025 operating cash flow/free cash flow about $48.3M). Offsetting this, profitability remains relatively thin/variable and leverage, while improved versus earlier years, increased again in 2025 with operating cash flow coverage of debt still modest.

Income Statement

Revenue growth has been strong and consistent, accelerating to 11.9% in 2025 (annual) from 7.6% in 2022, and profitability has improved versus earlier years (net margin up to ~3.1% in 2025 from ~0.6% in 2021). That said, profitability remains relatively thin for the level of execution required in care facilities, and margins show some inconsistency across years (including a lower net margin in 2025 vs. 2024). Also, 2025 gross profit and EBIT margin appear missing/zero in the provided data, which limits margin-quality assessment for the latest year.

Balance Sheet

Leverage has improved meaningfully from very elevated levels earlier (debt-to-equity ~3.3x in 2020 and ~3.2x in 2021 down to ~0.93x in 2024), but it moved back up to ~1.36x in 2025 alongside a sizable increase in total debt. Equity has grown and returns on equity are positive (about 8.9% in 2025), yet the balance sheet still carries notable debt for a business where cash flow stability is critical, increasing financial risk if operating conditions soften.

Cash Flow

Cash generation has strengthened materially from negative operating cash flow in 2021 to positive and growing levels, reaching about $48.3M of operating cash flow and free cash flow in 2025, with strong free cash flow growth in the latest year. Cash flow also supports earnings quality (free cash flow roughly matches net income in 2025). The main drawback is that operating cash flow remains modest relative to the debt load (coverage is ~0.33 in 2025), and free cash flow was negative as recently as 2022, highlighting some historical volatility.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	947.71M	695.24M	544.89M	473.24M	439.69M
Gross Profit	122.47M	93.76M	67.04M	58.59M	48.59M
EBITDA	60.85M	44.44M	30.64M	17.61M	9.46M
Net Income	29.58M	22.56M	13.38M	6.64M	2.70M
Balance Sheet
Total Assets	968.18M	679.52M	539.69M	512.12M	530.30M
Cash, Cash Equivalents and Short-Term Investments	17.02M	24.25M	6.06M	2.08M	5.19M
Total Debt	453.16M	273.09M	329.63M	326.57M	355.24M
Total Liabilities	593.93M	367.56M	394.18M	386.46M	416.05M
Stockholders Equity	332.60M	293.28M	140.34M	121.01M	110.20M
Cash Flow
Free Cash Flow	48.29M	30.31M	24.98M	-5.13M	-24.53M
Operating Cash Flow	48.29M	39.30M	33.09M	9.04M	-18.22M
Investing Cash Flow	-227.97M	-70.68M	-30.22M	-24.24M	-20.12M
Financing Cash Flow	172.46M	49.57M	1.11M	12.08M	43.49M

Pennant Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 33.71
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 33.71 is above the 20-day moving average (MA) of 31.09, above the 50-day MA of 29.87, and above the 200-day MA of 26.96, indicating a bullish trend. The MACD of 0.90 indicates Negative momentum. The RSI at 62.19 is Neutral, neither overbought nor oversold. The STOCH value of 69.14 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
HCSG	73 Outperform	$1.53B	26.70	11.69%	―	6.26%	-19.33%
PNTG	72 Outperform	$1.17B	40.26	10.87%	―	29.89%	10.33%
SEM	65 Neutral	$1.86B	12.85	5.57%	1.69%	-22.96%	-59.35%
USPH	65 Neutral	$1.26B	58.36	4.45%	2.25%	17.50%	154.28%
ASTH	60 Neutral	$1.02B	107.00	1.29%	―	68.17%	-85.42%
AMN	52 Neutral	$752.73M	-7.81	-35.90%	―	-11.42%	-617.31%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Pennant Group Corporate Events

Pennant Group Posts Record 2025 Results, Eyes 2026 Growth

The Pennant Group reported record fourth-quarter and full-year 2025 results on February 25, 2026, with full-year GAAP diluted EPS of $0.84 and adjusted EPS of $1.18, driven by a 36.3% rise in total revenue to $947.7 million and strong growth in both home health and hospice services and senior living. Management highlighted that strategic acquisitions and expansion, including a growing Southeast footprint and assets acquired from UnitedHealth and Amedisys, fueled sharp increases in admissions, hospice census, occupancy and profitability, and set expectations for further revenue and adjusted EBITDA growth in 2026 as the company focuses on integrating new operations and sustaining operational and clinical performance.

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