Select Medical (SEM) AI Stock Analysis

• Market Cap: $1.88B
• Dividend Yield: 1.69%
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 17.5
• Beta (1Y): 0.88
• 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: 2.69
• Enterprise Value/Revenue: 1.29
• Enterprise Value/Gross Profit: 15.64
• Enterprise Value/Ebitda: 21.78
• 1Y Price Target: $18.75
• Price Target Upside: 22.87% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $16.50 ▲(8.13% Upside)

Select Medical's overall stock score reflects a combination of strong earnings call performance and positive technical indicators, offset by financial risks related to high leverage and declining cash flow growth. The valuation is moderate, providing some stability.

Positive Factors

Inpatient Rehab Division Growth

The strong growth in the inpatient rehab division indicates robust demand and effective management, contributing to long-term revenue stability.

Regulatory Relief

Regulatory relief provides a favorable revenue adjustment, enhancing financial predictability and supporting sustainable growth.

Leadership Continuity

The renewal of the CEO's contract ensures leadership stability, which is crucial for executing long-term strategic plans and maintaining investor confidence.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Declining Cash Flow Growth

Reduced cash flow growth can strain operations and limit the company's ability to fund new projects or manage debt effectively.

Outpatient Rehab Division Challenges

Challenges in the outpatient rehab division, such as declining margins, could hinder overall 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 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 care hospital stays, physical and occupational therapy sessions, and other medical services provided to patients. The company also receives reimbursements from government programs like Medicare and Medicaid, as well as private insurance companies. Significant partnerships with healthcare providers and payers enhance their revenue potential, while strategic acquisitions of healthcare facilities further expand their operational footprint. In addition, Select Medical's focus on improving patient outcomes and reducing hospital readmission rates is integral to maintaining a sustainable revenue model.

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: 15.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 15.26 is above the 20-day moving average (MA) of 15.09, above the 50-day MA of 14.44, and above the 200-day MA of 14.32, indicating a bullish trend. The MACD of 0.17 indicates Positive momentum. The RSI at 59.39 is Neutral, neither overbought nor oversold. The STOCH value of 77.30 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	$1.88B	11.74	19.98%	―	-4.21%	―
NHC	74 Outperform	$2.05B	19.85	9.94%	1.80%	23.74%	-18.99%
SEM	69 Neutral	$1.88B	17.52	5.57%	1.69%	-22.96%	-59.35%
BKD	61 Neutral	$2.67B	-8.52	-214.33%	―	3.93%	-42.22%
ASTH	61 Neutral	$1.41B	148.53	1.29%	―	68.17%	-85.42%
AVAH	58 Neutral	$1.85B	24.61	―	―	15.48%	―
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Select Medical Corporate Events

Select Medical renews CEO Mullin under new agreement

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 one-year renewals, receiving an annual base salary of $700,000 and being subject to non-competition and non-solicitation restrictions during employment and for two years after. The agreement also provides that if Mullin is terminated by Select without cause and not due to death or disability, he will receive severance equal to 12 months of base salary, and the company confirmed there are no related-party, family, or other arrangements requiring additional regulatory disclosure, signaling a straightforward, governance-compliant leadership continuity arrangement for stakeholders.

The most recent analyst rating on (SEM) stock is a Buy with a $16.50 price target. To see the full list of analyst forecasts on Select Medical stock, see the SEM Stock Forecast page.

Select Medical Receives Acquisition Proposal from Co-Founder

On November 24, 2025, Select Medical Holdings Corporation received a non-binding proposal from Robert A. Ortenzio, the company’s Executive Chairman and Co-Founder, to acquire all outstanding shares for $16.00 to $16.20 per share. The board’s disinterested members are reviewing the proposal with advisors, emphasizing their commitment to the best interests of the company and its shareholders. The outcome of this proposal remains uncertain, and further comments will be made only if necessary.

The most recent analyst rating on (SEM) stock is a Buy with a $20.00 price target. To see the full list of analyst forecasts on Select Medical stock, see the SEM Stock Forecast page.

Select Medical Reports Strong 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.