Pennant Group (PNTG) AI Stock Analysis

• Market Cap: $955.48M
• Dividend Yield: N/A
• Average Volume (3M): 307.75K
• Price to Earnings (P/E): 36.5
• Beta (1Y): 0.77
• 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: 1.31
• Enterprise Value/Revenue: 1.48
• Enterprise Value/Gross Profit: 9.60
• Enterprise Value/Ebitda: 24.13
• 1Y Price Target: $37.60
• Price Target Upside: 36.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $30.00 ▲(8.62% Upside)

The score is driven primarily by improving fundamentals and cash conversion, supported by a notably strong earnings call with raised guidance and rapid revenue growth. Offsetting factors are a premium valuation (P/E 36.52) and softer near-term technical setup with the stock below its 20- and 50-day moving averages.

Positive Factors

Strong Revenue Growth

Consistent high-single to double-digit revenue growth and a 26.8% YoY increase in Q3 indicate expanding patient volumes and stronger service adoption. Sustained top-line momentum supports scale economics, reinvestment in operations, and longer-term revenue visibility across segments.

Acquisition Expands Scale and Footprint

The acquisition materially increases scale and adds a Southeast footprint, boosting referral networks and operational scope. Structural geographic expansion enhances negotiating leverage with payors and creates potential operating leverage benefits as the business integrates and standardizes care models.

Improving Cash Conversion

Strong free cash flow growth and a healthy FCF-to-net income ratio demonstrate reliable cash conversion from operations. Durable cash generation supports debt reduction, acquisition funding, and reinvestment without heavy equity issuance, improving long-term financial flexibility.

Negative Factors

High Leverage

A debt-to-equity ratio around 1.00 reflects significant leverage that can constrain strategic flexibility. Elevated debt increases interest and refinancing exposure, which may limit capital allocation, slow deleveraging, or pressure margins if cash flows weaken during integration or regulatory headwinds.

Regulatory Risk: 2026 Home Health Rule

Pending changes to the 2026 home health rule create structural reimbursement risk for Medicare-related services. Even though fee-for-service Medicare is <20% of revenue, rule shifts can alter payment rates and margins, affecting long-term revenue mix, planning assumptions, and investment decisions.

Integration Complexity and Elevated G&A

Large-scale integration of the acquired operations and sustained higher G&A pose execution risk. Prolonged integration can depress margins, distract management, and introduce operational variability that may persist across multiple quarters, affecting near- to medium-term profitability and cash flow stability.

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

Solid operating trends with consistent revenue growth and improving profitability (TTM revenue +6.05%, gross margin 13.54%, net margin 3.36%). Cash generation is supportive (FCF growth 11.35%, FCF-to-net income 0.78). Main offset is leverage, with debt-to-equity at 1.00 despite improvement.

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: Neutral
• Last Price: 27.62
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PNTG, the sentiment is Neutral. The current price of 27.62 is below the 20-day moving average (MA) of 28.90, below the 50-day MA of 28.71, and above the 200-day MA of 26.50, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 41.72 is Neutral, neither overbought nor oversold. The STOCH value of 13.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PNTG.

Pennant Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HCSG	72 Outperform	$1.33B	34.83	8.07%	―	6.26%	-19.33%
PNTG	69 Neutral	$955.48M	36.51	10.87%	―	29.89%	10.33%
SEM	69 Neutral	$1.86B	17.22	5.57%	1.69%	-22.96%	-59.35%
USPH	63 Neutral	$1.28B	34.65	7.30%	2.25%	17.50%	154.28%
ASTH	62 Neutral	$1.14B	119.68	1.29%	―	68.17%	-85.42%
AMN	57 Neutral	$818.21M	-2.96	-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 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.

The most recent analyst rating on (PNTG) stock is a Hold with a $27.00 price target. To see the full list of analyst forecasts on Pennant Group stock, see the PNTG Stock Forecast page.

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.

The most recent analyst rating on (PNTG) stock is a Hold with a $27.00 price target. To see the full list of analyst forecasts on Pennant Group stock, see the PNTG Stock Forecast page.