Select Medical Holdings Corp. (SEM)
NYSE:SEM
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Select Medical
(NYSE:SEM)
Select Model
Select Model
Rating:65Neutral
Price Target:
$17.50
▲(6.77% Upside)
Action:ReiteratedDate:04/25/26
SEM scores as a mid-range opportunity primarily due to mixed financial performance—strong cash flow and improved leverage offset by sharp 2025 margin/EBIT compression. Technicals are supportive but near overbought, valuation is reasonable, and the latest call/guidance is constructive but weighed down by outpatient profit weakness and a guidance shortfall. The go-private deal is a notable positive catalyst that supports the overall score.
Positive Factors
Free cash flow generation
Sustained FCF conversion (FCF roughly ~1.0x–1.1x of net income) provides durable internal funding for capex, dividend distribution and deleveraging. Strong cash generation reduces reliance on external financing and supports execution of growth and JV projects over the medium term.
Negative Factors
Margin and earnings deterioration
Margin compression and near break-even EBIT indicate profitability volatility despite top-line recovery. Structural headwinds (reimbursements, startup timing, health insurance cost) can pressure returns and free cash flow unless operating efficiencies or pricing recover, creating multi-quarter execution risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
Sustained FCF conversion (FCF roughly ~1.0x–1.1x of net income) provides durable internal funding for capex, dividend distribution and deleveraging. Strong cash generation reduces reliance on external financing and supports execution of growth and JV projects over the medium term.
Read all positive factors
Select Medical (SEM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.04B
Dividend Yield1.69%
Average Volume (3M)1.19M
Price to Earnings (P/E)12.5
Beta (1Y)0.70
Revenue Growth-17.66%
EPS Growth-30.16%
CountryUS
Employees30,000
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)0.16
Shares Outstanding124,018,300
10 Day Avg. Volume1,406,764
30 Day Avg. Volume1,192,837
Financial Highlights & Ratios
PEG Ratio-0.43
Price to Book (P/B)1.08
Price to Sales (P/S)0.34
P/FCF Ratio4.79
Enterprise Value/Market Cap2.80
Enterprise Value/Revenue1.05
Enterprise Value/Gross Profit9.64
Enterprise Value/Ebitda10.78
Forecast
1Y Price Target
$16.50Price Target Upside0.67% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)1.26
Revenue Forecast (FY)$5.69B
Select Medical Business Overview & Revenue Model
Company Description
Select Medical Holdings Corporation, through its subsidiaries, operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States. The company's Critical ...
How the Company Makes Money
Select Medical makes money primarily by providing patient care services and billing third-party payers (and, in some cases, patients) based on the setting of care and services delivered. Major revenue streams include: (1) Critical Illness Recovery...
Select Medical Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: solid top-line growth and a strong inpatient rehab development pipeline, meaningful improvement in full-year EPS, stabilized labor costs, and constructive 2026 guidance support a positive operational outlook. However, near-term profitability was hampered by a 10% decline in quarterly adjusted EBITDA, a significant slump in outpatient segment profitability (nearly 58% drop in adjusted EBITDA), an unexpected ~$15M health insurance hit, receivable write-offs, and modest cash on hand against substantial debt. These negatives constrained Q4 results and caused a notable shortfall versus prior guidance, but management expects outpatient margins to improve and reiterates growth initiatives in inpatient rehab.Positive Updates
Consolidated Revenue Growth
Total revenue grew more than 6% year-over-year in Q4 2025 and more than 5% for the full year 2025, demonstrating top-line growth across all three divisions.
Negative Updates
Quarterly Adjusted EBITDA Decline
Adjusted EBITDA declined 10% year-over-year in Q4 to $104.7M (from $116.0M). Full-year adjusted EBITDA decreased to $493.2M from $510.4M (down ~3.4%), with consolidated adjusted EBITDA margin falling to 9.0% from 9.8% in 2024.
Read all updates
Q4-2025 Updates
Positive
Negative
Consolidated Revenue Growth
Total revenue grew more than 6% year-over-year in Q4 2025 and more than 5% for the full year 2025, demonstrating top-line growth across all three divisions.
Read all positive updates
Company Guidance
Select Medical issued 2026 guidance calling for revenue of $5.6–$5.8 billion, adjusted EBITDA of $520–$540 million, fully diluted EPS of $1.22–$1.32, and capital expenditures of $200–$220 million; the company also expects to add 399 beds across 2026–2027 (including 166 added so far this year). Recent quarter metrics included $1.8 billion of debt and $26.5 million of cash, net leverage of 3.67x, $469.1 million of revolver availability, $1.04 billion of term loans (SOFR +200 bps, matures 12/03/2031), $550 million of 6.25% senior notes due 2032, interest expense of $28.9 million for the quarter, DSO of 57 days, $64.3 million of operating cash flow, $66.9 million used in investing (including $59.1 million of purchases of property & equipment), financing uses of $31.0 million, and a Board-approved cash dividend of $0.0625 per share payable 03/12/2026 (record 03/02/2026).Select Medical Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
63
Positive
Cash Flow
71
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.45B | 5.19B | 6.66B | 6.33B | 6.20B |
| Gross Profit | 629.29M | 633.64M | 932.04M | 733.38M | 919.37M |
| EBITDA | 530.63M | 507.27M | 789.74M | 635.51M | 968.35M |
| Net Income | 146.22M | 214.04M | 243.49M | 158.99M | 402.23M |
Balance Sheet | |||||
| Total Assets | 5.85B | 5.61B | 7.69B | 7.67B | 7.36B |
| Cash, Cash Equivalents and Short-Term Investments | 26.52M | 59.69M | 111.59M | 172.76M | 74.31M |
| Total Debt | 3.70B | 2.70B | 4.52B | 5.16B | 4.76B |
| Total Liabilities | 3.82B | 3.61B | 6.12B | 6.27B | 6.00B |
| Stockholders Equity | 1.71B | 1.68B | 1.29B | 1.12B | 1.11B |
Cash Flow | |||||
| Free Cash Flow | 382.74M | 539.65M | 352.86M | 94.45M | 220.69M |
| Operating Cash Flow | 346.47M | 517.86M | 582.06M | 284.82M | 401.23M |
| Investing Cash Flow | -216.49M | -231.01M | -268.48M | -226.34M | -256.59M |
| Financing Cash Flow | -163.15M | -311.17M | -327.48M | -34.89M | -647.38M |
Select Medical Technical Analysis
Positive
16.39
Price Trends
16.03
Positive
15.52
Positive
14.38
Positive
Market Momentum
0.11
Positive
67.33
Neutral
73.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEM, the sentiment is Positive. The current price of 16.39 is above the 20-day moving average (MA) of 16.33, above the 50-day MA of 16.03, and above the 200-day MA of 14.38, indicating a bullish trend. The MACD of 0.11 indicates Positive momentum. The RSI at 67.33 is Neutral, neither overbought nor oversold. The STOCH value of 73.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SEM.
Select Medical Risk Analysis
Select Medical disclosed 39 risk factors in its most recent earnings report. Select Medical reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Select Medical Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.75B | 17.67 | 11.57% | 1.80% | 17.53% | 17.13% | |
65 Neutral | $2.04B | 12.54 | 8.62% | 1.69% | -17.66% | -30.16% | |
63 Neutral | $1.54B | 54.15 | 2.93% | ― | 56.39% | -49.49% | |
54 Neutral | $1.94B | 11.03 | 19.58% | ― | -4.92% | ― | |
53 Neutral | $3.32B | -9.62 | -523.78% | ― | 2.19% | -26.04% | |
53 Neutral | $1.47B | 7.31 | 953.09% | ― | 20.19% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
SEM
Select Medical
16.45
-1.63
-9.01%
BKD
Brookdale Senior Living
14.14
7.63
117.20%
MD
Pediatrix Medical Group
22.96
10.40
82.80%
NHC
National Healthcare
174.64
79.90
84.34%
ASTH
Astrana Health
34.89
3.74
12.01%
AVAH
Aveanna Healthcare Holdings
6.70
2.09
45.34%
Select Medical Corporate Events
Executive/Board ChangesShareholder Meetings
Select Medical Shareholders Back Governance Changes at Annual Meeting
Positive
Apr 24, 2026
At its annual meeting of stockholders held on April 23, 2026, Select Medical shareholders re-elected three Class II directors, including executive leaders, and gave strong support in a non-binding vote to the compensation of the company’s na...
Business Operations and StrategyDelistings and Listing ChangesM&A TransactionsPrivate Placements and Financing
Select Medical agrees to go-private buyout transaction
Positive
Mar 3, 2026
On March 2, 2026, Select Medical Holdings Corporation announced it had entered a definitive agreement to be taken private by a consortium led by Executive Chairman and co‑founder Robert A. Ortenzio, senior executive Martin F. Jackson and pri...
Business Operations and StrategyDividendsFinancial Disclosures
Select Medical Declares Quarterly Dividend Amid Solid Results
Positive
Feb 19, 2026
Select Medical reported stronger financial performance for the fourth quarter and full year ended December 31, 2025, with quarterly revenue up 6.4% to $1.40 billion and full-year revenue up 5.1% to $5.45 billion. Income from continuing operations ...
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.