Select Medical Holdings Corp. (SEM)
NYSE:SEM
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Select Medical
(NYSE:SEM)
Select Model
Select Model
Rating:62Neutral
Price Target:
$17.50
▲(6.77% Upside)
Action:Reiterated
Date:05/01/26
The score is mainly held back by weaker profitability and volatile/free-cash-flow conversion despite an improved balance sheet. Technicals are supportive with the stock trading above key moving averages, while valuation is reasonable. Earnings call factors are mixed: guidance was maintained and regulatory proposals are a potential tailwind, but EBITDA/EPS declines, Medicare Advantage headwinds, and higher post-transaction leverage temper the outlook.
Positive Factors
Improved balance sheet and equity base
TTM improvement in leverage and a larger equity base provide durable financial flexibility. A stronger capital structure reduces refinancing risk, supports continued development spending and gives management room to absorb reimbursement volatility or invest in growth over the next several quarters.
Negative Factors
Compressed profitability and margins
Material margin erosion versus prior years indicates weakened earnings power. Persistent margin pressure from outpatient compression, payer mix shifts and cost pressures constrains sustainable net income and limits free cash flow available for reinvestment or deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved balance sheet and equity base
TTM improvement in leverage and a larger equity base provide durable financial flexibility. A stronger capital structure reduces refinancing risk, supports continued development spending and gives management room to absorb reimbursement volatility or invest in growth over the next several quarters.
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)11.4
Beta (1Y)0.67
Revenue Growth-10.76%
EPS Growth-20.86%
CountryUS
Employees30,000
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)1.09
Shares Outstanding124,016,800
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 Cap2.45
Enterprise Value/Revenue0.91
Enterprise Value/Gross Profit8.53
Enterprise Value/Ebitda9.90
Forecast
1Y Price Target
$16.50Price Target Upside0.67% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)1.23
Revenue Forecast (FY)$5.70B
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:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: revenue growth (total +5%) and strong inpatient rehabilitation performance (revenue +14%, adjusted EBITDA +15%) and an active development pipeline were clear positives, along with supportive proposed CMS payment updates and maintained full-year guidance. Offsetting these were a meaningful decline in consolidated adjusted EBITDA (-6.5%), lower EPS (0.35 vs 0.44), a 15% EBITDA decline in the critical illness segment driven by Medicare Advantage conversion/denials (~$13M–$14M impact), outpatient margin pressure, and elevated leverage that will increase with the contemplated $1.0B term loan upon the take-private. Overall, positives and negatives are balanced.Positive Updates
Take-Private Transaction Announced
Agreement to be acquired for $16.50 per share; unanimously approved by the Board; expected close mid-2026 (subject to approvals). Hart-Scott-Rodino waiting period expired Apr 27, 2026. Upon closing, company will become privately held and senior secured credit facilities will provide an additional $1.0B term loan at interest = SOFR + 3%.
Negative Updates
Overall Adjusted EBITDA and EPS Decline
Adjusted EBITDA declined 6.5% y/y to $141.0M (from $151.4M). Earnings per common share declined to $0.35 from $0.44 year-over-year (adjusted EPS $0.36 after take-private costs).
Read all updates
Q1-2026 Updates
Positive
Negative
Take-Private Transaction Announced
Agreement to be acquired for $16.50 per share; unanimously approved by the Board; expected close mid-2026 (subject to approvals). Hart-Scott-Rodino waiting period expired Apr 27, 2026. Upon closing, company will become privately held and senior secured credit facilities will provide an additional $1.0B term loan at interest = SOFR + 3%.
Read all positive updates
Company Guidance
Select Medical reiterated full‑year 2026 guidance of revenue $5.6–$5.8 billion, adjusted EBITDA $520–$540 million, fully diluted EPS $1.22–$1.32, and capital expenditures of $200–$220 million; the Board also approved a $0.0625 per share cash dividend payable May 28 to shareholders of record May 14. Management noted potential regulatory tailwinds if CMS finalizes proposed FY2027 rules that would raise the inpatient rehab (IRF) federal payment rate by ~2.6% and the LTACH rate by ~2.66% (high‑cost outlier threshold remaining at $78,936). Key balance‑sheet and near‑term operating metrics cited include $1.9 billion of total debt, $25.7 million of cash, net leverage of 3.75x, $443.5 million of revolver availability, DSO of 60 days, and development growth with 166 beds opened year‑to‑date and 275 additional beds expected (209 IRF, 66 critical illness) across 2026–2027, including planned 60‑bed and 76‑bed hospital openings.Select Medical Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
68
Positive
Cash Flow
46
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.52B | 5.45B | 5.19B | 6.66B | 6.33B | 6.20B |
| Gross Profit | 588.00M | 629.29M | 633.64M | 932.04M | 733.38M | 919.37M |
| EBITDA | 506.65M | 530.63M | 507.27M | 789.74M | 635.51M | 968.35M |
| Net Income | 133.53M | 146.22M | 214.04M | 243.49M | 158.99M | 402.23M |
Balance Sheet | ||||||
| Total Assets | 6.04B | 5.85B | 5.61B | 7.69B | 7.67B | 7.36B |
| Cash, Cash Equivalents and Short-Term Investments | 25.68M | 26.52M | 59.69M | 111.59M | 172.76M | 74.31M |
| Total Debt | 2.99B | 3.70B | 2.70B | 4.52B | 5.16B | 4.76B |
| Total Liabilities | 3.94B | 3.82B | 3.61B | 6.12B | 6.27B | 6.00B |
| Stockholders Equity | 1.76B | 1.71B | 1.68B | 1.29B | 1.12B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 117.24M | 382.74M | 539.65M | 352.86M | 94.45M | 220.69M |
| Operating Cash Flow | 346.47M | 346.47M | 517.86M | 582.06M | 284.82M | 401.23M |
| Investing Cash Flow | -213.55M | -216.49M | -231.01M | -268.48M | -226.34M | -256.59M |
| Financing Cash Flow | -166.09M | -163.15M | -311.17M | -327.48M | -34.89M | -647.38M |
Select Medical Technical Analysis
Positive
16.39
Price Trends
16.31
Positive
15.79
Positive
14.56
Positive
Market Momentum
0.06
Negative
71.35
Negative
81.52
Negative
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 below the 20-day moving average (MA) of 16.40, above the 50-day MA of 16.31, and above the 200-day MA of 14.56, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 71.35 is Negative, neither overbought nor oversold. The STOCH value of 81.52 is Negative, 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 44 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.07B | 17.30 | 11.68% | 1.80% | 11.40% | 13.96% | |
72 Outperform | $1.86B | 15.02 | 20.09% | ― | -2.25% | ― | |
71 Outperform | $1.68B | 8.22 | 241.47% | ― | 20.49% | 4335.46% | |
68 Neutral | $1.75B | 20.74 | 3.88% | ― | 56.69% | -15.92% | |
62 Neutral | $2.04B | 11.43 | 7.83% | 1.69% | -10.76% | -20.86% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
47 Neutral | $3.17B | -118.16 | 9999.00% | ― | -0.36% | 16.69% |
* Healthcare Sector Average
SEM
Select Medical
16.52
2.03
14.00%
BKD
Brookdale Senior Living
13.34
6.78
103.35%
MD
Pediatrix Medical Group
22.47
7.30
48.12%
NHC
National Healthcare
199.51
98.25
97.03%
ASTH
Astrana Health
38.76
13.57
53.87%
AVAH
Aveanna Healthcare Holdings
7.68
2.19
39.89%
Select Medical Corporate Events
Business Operations and StrategyExecutive/Board ChangesDelistings and Listing ChangesDividendsFinancial DisclosuresM&A Transactions
Select Medical Declares Dividend Amid Mixed Quarterly Results
Positive
Apr 30, 2026
On April 28, 2026, Select Medical’s board-level compensation committee deferred by one year the vesting of several equity award tranches previously granted to Executive Chairman and Co-Founder Robert A. Ortenzio and Senior Executive Vice Pre...
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.