Select Medical (SEM) AI Stock Analysis

• Market Cap: $1.59B
• Dividend Yield: 1.95%
• Average Volume (3M): 1.14M
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.75
• Revenue Growth: -16.10%
• EPS Growth: -48.97%
• Country: US
• Employees: 30,000
• Sector: Healthcare
• Sector Strength: 47
• Industry: Medical - Care Facilities
• EPS (TTM): 0.32
• Shares Outstanding: 123,989,260
• 10 Day Avg. Volume: 918,546
• 30 Day Avg. Volume: 1,141,427
• PEG Ratio: -0.87
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 0.47
• P/FCF Ratio: 4.51
• Enterprise Value/Market Cap: 3.18
• Enterprise Value/Revenue: 1.17
• Enterprise Value/Gross Profit: 13.93
• Enterprise Value/Ebitda: 15.55
• 1Y Price Target: $17.40
• Price Target Upside: 33.33% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 71 Outperform
• Price Target: $14.00 ▲(7.28% Upside)

Select Medical's overall score is driven by solid earnings call results and strategic corporate events, countered by technical analysis indicating bearish momentum. Financial performance shows stability, albeit with leverage concerns.

Positive Factors

Inpatient Rehab Growth

Inpatient Rehab is seeing a positive impact with significant revenue growth and patient day increases.

Outpatient Rehab Efficiency

Outpatient Rehab is benefiting from clinical efficiency initiatives, leading to an improved AEBITDA margin.

Stock Valuation

The stock is considered undervalued at a discount compared to peers, with potential for rerating as growth resumes.

Negative Factors

AEBITDA Guidance Reduction

The shares pulled back sharply to ~$14 after a 1Q miss that led to FY25 AEBITDA guidance being reduced 2% at the midpoint.

LTACH Challenges

LTACH is expected to face continued challenges due to the high-cost outlier patient threshold.

Medicare Reimbursement

LT Acute Care is expected to experience more stable margins with diminishing Medicare reimbursement headwinds potentially starting in FY26.

Select Medical Business Overview & Revenue Model

Company Description

Select Medical (SEM) is a leading provider of post-acute medical care, specializing in rehabilitation and critical illness recovery. The company operates a diverse portfolio of facilities, including long-term acute care hospitals, outpatient rehabilitation clinics, and inpatient rehabilitation hospitals. With a focus on delivering high-quality patient care, Select Medical aims to improve patient outcomes through tailored treatment plans and a multidisciplinary approach to rehabilitation services.

How the Company Makes Money

Select Medical generates revenue primarily through its healthcare services, which are reimbursed by government programs, private insurance payers, and self-paying patients. Key revenue streams include payments for inpatient rehabilitation services, outpatient therapy sessions, and long-term acute care hospital services. The company also benefits from contracts with various insurance companies and partnerships with healthcare systems, which provide a steady flow of patients. Additionally, Select Medical's business model capitalizes on the growing demand for rehabilitation services as the population ages and more individuals require specialized post-acute care.

Select Medical Financial Statement Overview

Summary

Select Medical exhibits stable yet challenged financials with declining revenues and moderate profitability. The high leverage on the balance sheet poses potential risks, though cash flow remains strong, indicating efficient cash management.

Income Statement

The TTM shows a gross profit margin of 8.4% and a net profit margin of 3.2%, indicating moderate profitability. Revenue has declined in recent years, with a notable drop from 2023 to 2024. EBIT and EBITDA margins are relatively low at 0.7% and 5.7%, respectively, pointing to efficiency challenges. The overall income statement reflects stable but declining revenues with pressure on profit margins.

Balance Sheet

The company has a high debt-to-equity ratio of 0.61 in the TTM, suggesting significant leverage. Return on equity (ROE) is moderate at 8.2%, showing decent returns for shareholders. The equity ratio of 29.0% denotes a moderate reliance on equity financing, but high liabilities could pose risks if not managed carefully.

Cash Flow

The cash flow analysis reveals a decline in free cash flow growth, but the operating cash flow to net income ratio of 3.0 in the TTM is strong, indicating effective cash generation relative to net income. The free cash flow to net income ratio is 1.3, also highlighting solid cash flow management despite capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.33B	5.19B	6.66B	6.33B	6.20B	5.53B
Gross Profit	363.69M	633.64M	932.04M	733.38M	919.37M	821.34M
EBITDA	325.82M	510.23M	789.74M	585.31M	772.72M	683.30M
Net Income	136.83M	214.04M	243.49M	158.99M	402.23M	259.00M
Balance Sheet
Total Assets	5.74B	5.61B	7.69B	7.67B	7.36B	7.66B
Cash, Cash Equivalents and Short-Term Investments	52.35M	59.69M	142.97M	97.91M	74.31M	577.06M
Total Debt	2.88B	2.70B	4.96B	5.12B	4.72B	4.50B
Total Liabilities	3.74B	3.61B	6.12B	6.31B	6.03B	6.40B
Stockholders Equity	1.67B	1.68B	1.29B	1.32B	1.33B	1.06B
Cash Flow
Free Cash Flow	182.10M	539.65M	352.86M	94.45M	220.69M	881.63M
Operating Cash Flow	413.24M	517.86M	582.06M	284.82M	401.23M	1.03B
Investing Cash Flow	-236.27M	-231.01M	-268.48M	-226.34M	-256.59M	-115.35M
Financing Cash Flow	-235.78M	-311.17M	-327.48M	-34.89M	-647.38M	-671.54M

Select Medical Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 13.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEM, the sentiment is Neutral. The current price of 13.05 is above the 20-day moving average (MA) of 12.66, below the 50-day MA of 13.86, and below the 200-day MA of 16.71, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 47.98 is Neutral, neither overbought nor oversold. The STOCH value of 54.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SEM.

Select Medical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ASTH	72 Outperform	$1.51B	58.68	3.50%	―	51.97%	-64.10%
SEM	71 Outperform	$1.59B	12.03	8.15%	1.95%	-16.10%	-48.97%
ACHC	70 Outperform	$1.99B	14.20	4.62%	―	5.64%	―
NHC	69 Neutral	$1.73B	16.61	10.65%	2.21%	25.19%	13.44%
SGRY	63 Neutral	$2.91B	―	-9.75%	―	12.05%	-432.59%
LFST	61 Neutral	$2.10B	―	-1.11%	―	13.86%	89.49%
Sector *	51 Neutral	$7.83B	-0.18	-40.10%	2.29%	21.46%	-2.03%

Select Medical Corporate Events

Select Medical Updates Bylaws for Proxy Compliance

On July 30, 2025, Select Medical Holdings Corporation’s Board of Directors approved amendments to the company’s bylaws. These changes enhance procedural and disclosure requirements for stockholder nominations and proposals at meetings, aligning with SEC’s universal proxy rules. The amendments require stockholders to provide a proxy statement and evidence of soliciting proxies from holders of at least 67% of the voting power for director elections, impacting the company’s governance and stakeholder engagement.

The most recent analyst rating on (SEM) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on Select Medical stock, see the SEM Stock Forecast page.

Select Medical Reports Strong Q2 2025 Financial Results

Select Medical Holdings Corporation announced its financial results for the second quarter of 2025, reporting a 4.5% increase in revenue to $1,339.6 million and a significant 53.8% rise in net income from continuing operations to $57.9 million compared to the previous year. The company also declared a cash dividend of $0.0625 per share, payable on August 28, 2025, and announced a stock repurchase program to buy back up to $1.0 billion worth of shares, reflecting its robust financial performance and commitment to returning value to shareholders.

The most recent analyst rating on (SEM) stock is a Buy with a $21.00 price target. To see the full list of analyst forecasts on Select Medical stock, see the SEM Stock Forecast page.