Select Medical (SEM) AI Stock Analysis

• Market Cap: $1.66B
• Dividend Yield: 1.83%
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.71
• Revenue Growth: -22.96%
• EPS Growth: -59.35%
• Country: US
• Employees: 30,000
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 0.23
• Shares Outstanding: 123,817,590
• 10 Day Avg. Volume: 1,406,764
• 30 Day Avg. Volume: 1,192,837
• 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: 3.06
• Enterprise Value/Revenue: 1.29
• Enterprise Value/Gross Profit: 15.64
• Enterprise Value/Ebitda: 21.78
• 1Y Price Target: $18.75
• Price Target Upside: 37.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: $15.00 ▲(9.89% Upside)

Select Medical's overall stock score is driven by strong earnings call results and moderate technical indicators. However, financial performance concerns, particularly high leverage and declining cash flow, weigh on the score. The valuation is fair, providing a balanced risk-reward profile.

Positive Factors

Inpatient Rehab Division Growth

Strong growth in the inpatient rehab division indicates robust demand and effective service delivery, supporting long-term revenue expansion.

Regulatory Relief

Regulatory relief provides a more favorable operating environment, potentially improving margins and financial stability over the medium term.

Expansion Plans

Strategic expansion through acquisitions and new clinics enhances market presence and capacity, driving future growth opportunities.

Negative Factors

High Leverage

High leverage can constrain financial flexibility and increase risk, potentially impacting long-term investment and operational strategies.

Declining Cash Flow

Declining cash flow growth limits the company's ability to reinvest in operations and manage debt, posing a risk to financial health.

Outpatient Rehab Division Challenges

Challenges in the outpatient rehab division, including reimbursement issues, may hinder profitability and require strategic adjustments.

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 Illness Recovery Hospital segment consists of hospitals that provide services for heart failure, infectious disease, respiratory failure and pulmonary disease, surgery requiring prolonged recovery, renal disease, neurological events, and trauma. Its Rehabilitation Hospital segment offers therapy and rehabilitation treatments, including rehabilitative services for brain and spinal cord injuries, strokes, amputations, neurological disorders, orthopedic conditions, pediatric congenital or acquired disabilities, and cancer. The company's Outpatient Rehabilitation segment operates rehabilitation clinics that provide physical, occupational, and speech rehabilitation programs and services; and specialized programs, such as functional programs for work related injuries, hand therapy, post-concussion rehabilitation, pediatric and cancer rehabilitation, and athletic training services. Its Concentra segment operates and provides occupational health centers and contract services at employer worksites that deliver occupational medicine, consumer health, physical therapy, and wellness services. As of December 31, 2021, the company operated 104 critical illness recovery hospitals in 28 states; 30 rehabilitation hospitals in 12 states; 1,881 outpatient rehabilitation clinics in 38 states and the District of Columbia; and 518 occupational health centers in 41 states, and 134 onsite clinics at employer worksites states. Select Medical Holdings Corporation was founded in 1996 and is headquartered in Mechanicsburg, Pennsylvania.

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's financial performance shows challenges with declining revenue and profit margins, coupled with high leverage. Despite some operational efficiencies, the high debt levels and declining cash flow growth pose significant risks.

Income Statement

Select Medical's income statement shows a mixed performance. The TTM data indicates a decline in revenue by 6.9%, which is concerning. Gross profit margin has decreased slightly over the years, and the net profit margin has also seen a decline in the TTM period. However, the company has maintained positive net income, and the EBITDA margin remains positive, indicating some operational efficiency. The declining revenue growth rate is a key area of concern.

Balance Sheet

The balance sheet reveals a high level of debt, with a debt-to-equity ratio of 0.61 in the TTM period, which is an improvement from previous years but still indicates significant leverage. Return on equity has decreased over time, reflecting reduced profitability relative to shareholder equity. The equity ratio is stable, suggesting a reasonable proportion of assets financed by equity. Overall, the balance sheet shows high leverage, which poses a risk.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth in the TTM period, which is a concern. The operating cash flow to net income ratio is moderate, indicating that the company is generating cash relative to its net income. The free cash flow to net income ratio is also moderate, suggesting some ability to generate cash from operations. The decline in free cash flow growth is a key risk factor.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.93B	5.19B	6.66B	6.33B	6.20B	5.53B
Gross Profit	323.97M	633.64M	932.04M	733.38M	919.37M	821.34M
EBITDA	232.70M	507.27M	789.74M	635.51M	968.35M	683.30M
Net Income	110.00M	214.04M	243.49M	158.99M	402.23M	259.00M
Balance Sheet
Total Assets	5.69B	5.61B	7.69B	7.67B	7.36B	7.66B
Cash, Cash Equivalents and Short-Term Investments	60.05M	59.69M	111.59M	172.76M	74.31M	577.06M
Total Debt	1.03B	2.70B	4.52B	5.16B	4.76B	4.50B
Total Liabilities	3.67B	3.61B	6.12B	6.27B	6.00B	6.00B
Stockholders Equity	1.69B	1.68B	1.29B	1.12B	1.11B	1.06B
Cash Flow
Free Cash Flow	174.02M	539.65M	352.86M	94.45M	220.69M	881.63M
Operating Cash Flow	407.57M	517.86M	582.06M	284.82M	401.23M	1.03B
Investing Cash Flow	-223.79M	-231.01M	-268.48M	-226.34M	-256.59M	-115.35M
Financing Cash Flow	-315.20M	-311.17M	-327.48M	-34.89M	-647.38M	-671.54M

Select Medical Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 13.65 is above the 20-day moving average (MA) of 13.43, above the 50-day MA of 13.20, and below the 200-day MA of 14.72, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 56.90 is Neutral, neither overbought nor oversold. The STOCH value of 45.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SEM.

Select Medical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MD	76 Outperform	$1.98B	12.19	19.98%	―	-4.21%	―
NHC	72 Outperform	$2.02B	20.12	9.94%	1.97%	23.74%	-18.99%
SEM	67 Neutral	$1.66B	15.35	5.57%	1.83%	-22.96%	-59.35%
BKD	58 Neutral	$2.57B	―	-214.33%	―	3.93%	-42.22%
ASTH	56 Neutral	$1.13B	118.42	1.29%	―	68.17%	-85.42%
AVAH	54 Neutral	$1.83B	24.28	―	―	15.48%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Select Medical Corporate Events

Select Medical Reports Strong Q3 2025 Financial Results

On October 30, 2025, Select Medical Holdings Corporation announced its financial results for the third quarter ended September 30, 2025, reporting a 7.2% increase in revenue to $1,363.4 million and a 32.9% rise in income from continuing operations before other income and expense. The company also declared a cash dividend of $0.0625 per share, payable on November 25, 2025. The announcement highlights Select Medical’s strong financial performance and strategic positioning in the healthcare industry, reflecting its robust operational capabilities and commitment to shareholder returns.

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.

Select Medical Appoints New CEO Thomas P. Mullin

On September 2, 2025, Select Medical Holdings Corporation announced the appointment of Thomas P. Mullin as the new Chief Executive Officer, effective September 1, 2025. This leadership change marks a significant transition as David S. Chernow steps down from the CEO position to become Vice Chairman of the Board. John A. Saich will assume the role of sole President, and John F. Duggan has been named Executive Vice President, General Counsel, and Secretary. These appointments highlight Select Medical’s commitment to its succession planning and growth strategy, aiming to enhance its operations and deliver value to stakeholders.

The most recent analyst rating on (SEM) stock is a Buy with a $18.00 price target. To see the full list of analyst forecasts on Select Medical stock, see the SEM Stock Forecast page.

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.