Select Medical (SEM) AI Stock Analysis

• Market Cap: $1.46B
• Dividend Yield: 2.21%
• Average Volume (3M): 1.17M
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.77
• Revenue Growth: -16.10%
• EPS Growth: -48.97%
• Country: US
• Employees: 30,000
• Sector: Healthcare
• Sector Strength: 38
• Industry: Medical - Care Facilities
• EPS (TTM): 0.32
• Shares Outstanding: 123,989,260
• 10 Day Avg. Volume: 1,387,867
• 30 Day Avg. Volume: 1,165,693
• 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: 3.47
• Enterprise Value/Revenue: 1.17
• Enterprise Value/Gross Profit: 13.93
• Enterprise Value/Ebitda: 15.55
• 1Y Price Target: $17.25
• Price Target Upside: 44.11% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 71 Outperform
• Price Target: $14.00 ▲(16.96% 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

Earnings

The analyst remains constructive on SEM's outlook due to expected AEBITDA growth in the upcoming quarters.

Revenue Growth

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

Negative Factors

Challenges

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

Earnings Guidance

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

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 makes money primarily through its two main business segments: Specialty Hospitals and Outpatient Rehabilitation. In the Specialty Hospitals segment, revenue is generated by providing inpatient care services, including critical illness recovery and rehabilitation services, to patients who require long-term acute care. This includes payments from Medicare, Medicaid, and private insurance companies. In the Outpatient Rehabilitation segment, revenue is earned through physical therapy services offered in various outpatient clinics. The company also benefits from strategic partnerships and collaborations with healthcare providers and insurance companies, which help in expanding its patient base and optimizing reimbursement rates, thereby contributing to its overall earnings.

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: Negative
• Last Price: 11.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEM, the sentiment is Negative. The current price of 11.97 is below the 20-day moving average (MA) of 14.16, below the 50-day MA of 14.71, and below the 200-day MA of 17.23, indicating a bearish trend. The MACD of -0.59 indicates Positive momentum. The RSI at 24.47 is Positive, neither overbought nor oversold. The STOCH value of 4.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SEM.

Select Medical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NHC	75 Outperform	$1.49B	13.95	11.19%	2.61%	19.16%	31.92%
ASTH	73 Outperform	$1.11B	30.07	5.00%	―	54.81%	-45.07%
SEM	71 Outperform	$1.46B	11.03	8.15%	2.21%	-16.10%	-48.97%
ACHC	62 Neutral	$2.00B	11.86	4.62%	―	5.64%	―
SGRY	60 Neutral	$2.84B	―	-9.75%	―	12.05%	-432.59%
LFST	59 Neutral	$1.51B	―	-2.47%	―	16.31%	79.86%
Sector *	50 Neutral	AU$2.60B	3.65	-58.14%	2.69%	36.37%	13.78%

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.