Select Medical Holdings Corp. (SEM)
NYSE:SEM
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Select Medical
(NYSE:SEM)
Select Model
Select Model
Rating:62Neutral
Price Target:
$16.00
▼(-2.32% Downside)
Action:ReiteratedDate:03/04/26
The score is driven primarily by mixed financial performance—improving leverage and solid cash generation offset by meaningful 2025 margin/earnings deterioration. Technical indicators lean bearish in the near term. Valuation is supportive, while the earnings call was mixed (constructive 2026 outlook but significant outpatient and cost headwinds). The announced go-private transaction is a notable positive catalyst.
Positive Factors
Balance-sheet deleveraging
Material deleveraging has materially de-risked the capital structure, lowering interest and covenant pressure. Over the next 2–6 months this enhances financial flexibility to fund bed growth, absorb operating volatility, and execute on strategic initiatives with less refinancing risk.
Negative Factors
Outpatient profitability collapse
A near-60% drop in outpatient EBITDA reflects structural reimbursement pressure, unfavorable payer mix and higher variable discounts. Given outpatient's role in diversification, sustained weakness or slower recovery in volumes/margins will continue to depress consolidated profitability and cash flow.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet deleveraging
Material deleveraging has materially de-risked the capital structure, lowering interest and covenant pressure. Over the next 2–6 months this enhances financial flexibility to fund bed growth, absorb operating volatility, and execute on strategic initiatives with less refinancing risk.
Read all positive factors
Select Medical (SEM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.03B
Dividend Yield1.69%
Average Volume (3M)1.19M
Price to Earnings (P/E)12.5
Beta (1Y)0.78
Revenue Growth-22.96%
EPS Growth-59.35%
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 Cap2.81
Enterprise Value/Revenue1.05
Enterprise Value/Gross Profit9.62
Enterprise Value/Ebitda10.75
Forecast
1Y Price Target
$16.50Price Target Upside0.73% 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 generates revenue through multiple streams, primarily from the operations of its long-term acute care hospitals and outpatient rehabilitation clinics. Revenue is derived from patient care services, which includes billing for acute c...
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
16.38
Price Trends
15.78
Positive
15.22
Positive
14.31
Positive
Market Momentum
0.16
Positive
68.45
Neutral
75.58
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 16.38 is above the 20-day moving average (MA) of 16.27, above the 50-day MA of 15.78, and above the 200-day MA of 14.31, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 68.45 is Neutral, neither overbought nor oversold. The STOCH value of 75.58 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 | $2.55B | 17.67 | 11.57% | 1.80% | 23.74% | -18.99% | |
62 Neutral | $2.03B | 12.54 | 5.57% | 1.69% | -22.96% | -59.35% | |
62 Neutral | $1.30B | 54.15 | 2.93% | ― | 68.17% | -85.42% | |
58 Neutral | $3.30B | -9.62 | -523.78% | ― | 3.93% | -42.22% | |
54 Neutral | $1.80B | 11.03 | 19.58% | ― | -4.21% | ― | |
53 Neutral | $1.41B | 7.31 | 953.09% | ― | 15.48% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
SEM
Select Medical
16.38
0.91
5.90%
BKD
Brookdale Senior Living
13.89
8.76
170.76%
MD
Pediatrix Medical Group
21.69
8.42
63.45%
NHC
National Healthcare
164.13
75.98
86.19%
ASTH
Astrana Health
26.00
-5.09
-16.37%
AVAH
Aveanna Healthcare Holdings
6.49
1.69
35.21%
Select Medical Corporate Events
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 ...
Executive/Board ChangesRegulatory Filings and Compliance
Select Medical renews CEO Mullin under new agreement
Positive
Dec 19, 2025
On December 17, 2025, Select Medical Corporation entered into a new employment agreement with its Chief Executive Officer, Thomas P. Mullin, effective January 1, 2026, under which he will continue as CEO for an initial one-year term with automatic...
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.