Sunlink Health Systems (SSY) AI Stock Analysis

• Market Cap: $8.17M
• Dividend Yield: N/A
• Average Volume (3M): 171.25K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.22
• Revenue Growth: -12.45%
• EPS Growth: 46.73%
• Country: US
• Employees: 1,376
• Sector: Healthcare
• Sector Strength: 42
• Industry: Medical - Pharmaceuticals
• EPS (TTM): -0.10
• Shares Outstanding: 7,040,603
• 10 Day Avg. Volume: 134,456
• 30 Day Avg. Volume: 171,252
• PEG Ratio: 0.06
• Price to Book (P/B): 0.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.60
• Enterprise Value/Market Cap: 0.03
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: 0.03
• Enterprise Value/Ebitda: -0.04
• 1Y Price Target: $1.00
• Price Target Upside: -13.79% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 52 Neutral
• Price Target: $1.00 ▼(-13.79%Downside)

Sunlink Health Systems exhibits significant financial challenges, particularly with negative cash flows and declining revenues, which weigh heavily on its overall score. The technical analysis shows positive momentum, suggesting some investor optimism, but the valuation remains unattractive with a negative P/E ratio. The absence of earnings call data and corporate events further limits insights into future growth prospects.

Sunlink Health Systems Business Overview & Revenue Model

Company Description

SunLink Health Systems, Inc. (SSY) operates healthcare facilities across the United States, primarily focusing on rural markets. The company provides a range of medical services through its subsidiaries, which include community hospitals and related businesses. SunLink Health Systems is committed to offering accessible and quality healthcare services, which encompass both inpatient and outpatient care, alongside various ancillary services.

How the Company Makes Money

SunLink Health Systems generates revenue primarily through the operation of its healthcare facilities, which include community hospitals and clinics. The company earns income by providing a variety of medical services to patients, which are reimbursed by private insurance companies, government healthcare programs like Medicare and Medicaid, and direct payments from patients. Key revenue streams include inpatient and outpatient care services, diagnostic imaging, surgical services, emergency care, and other ancillary services such as laboratory and pharmacy. Partnerships with local healthcare providers and insurance companies further support the company's revenue generation by integrating services and facilitating patient referrals.

Sunlink Health Systems Financial Statement Overview

Summary

Sunlink Health Systems faces substantial financial challenges, particularly with declining revenues and negative cash flows. While the company's equity position is strong, indicating low reliance on debt, operational efficiency is a concern. The positive turn in net income during the TTM period is a positive sign, but ongoing cash flow issues could pose risks. The company needs to focus on improving its operational cash flow and reversing revenue declines to strengthen its financial standing.

Income Statement

Sunlink Health Systems shows a declining revenue trend with a significant drop in total revenue from previous years. The gross profit margin stood at about 34.1% for TTM, indicating some efficiency in managing production costs. However, the company struggles with profitability, as evidenced by a negative EBIT margin of -12.1% and EBITDA margin of -7.5%, though net income has turned positive in the TTM period with a net profit margin of about 3.2%. The revenue growth rate is negative, indicating a contraction in revenue.

Balance Sheet

The balance sheet shows a strong equity position with an equity ratio of 78.8% for TTM, suggesting low reliance on debt financing. The debt-to-equity ratio is low at 0.03, indicating minimal leverage. Return on equity is modest at 7.1%, reflecting positive but limited efficiency in generating returns from shareholder equity. The company has maintained a solid cash position, which provides a cushion against operational risks.

Cash Flow

The cash flow statement reveals significant challenges, with negative operating cash flow suggesting difficulties in generating cash from core operations. The free cash flow is also negative, reflecting issues in sustaining positive cash flow after capital expenditures. The free cash flow to net income ratio is negative, indicating that net income is not translating into free cash flow. Despite positive investing cash flow, the overall picture remains weak due to operational cash flow deficiencies.

Breakdown	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	32.44M	47.95M	41.34M	40.69M	47.81M
Gross Profit	12.90M	23.90M	20.11M	21.61M	24.65M
EBITDA	-453.00K	-1.66M	-3.80M	3.23M	1.12M
Net Income	-1.53M	-1.79M	-1.72M	6.89M	-586.00K
Balance Sheet
Total Assets	20.61M	23.27M	27.94M	31.56M	27.97M
Cash, Cash Equivalents and Short-Term Investments	7.17M	4.49M	6.79M	9.96M	11.18M
Total Debt	528.00K	1.08M	1.26M	4.34M	4.33M
Total Liabilities	4.64M	5.85M	8.82M	10.75M	14.23M
Stockholders Equity	15.97M	17.42M	19.12M	20.81M	13.74M
Cash Flow
Free Cash Flow	-4.45M	-2.54M	-3.19M	-1.23M	2.78M
Operating Cash Flow	-2.98M	-540.00K	-4.00K	1.36M	3.97M
Investing Cash Flow	5.67M	-1.78M	-3.13M	-2.55M	-626.00K
Financing Cash Flow	-8.00K	8.00K	-36.00K	-35.00K	99.00K

Sunlink Health Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SSY, the sentiment is Positive. The current price of 1.16 is above the 20-day moving average (MA) of 0.96, above the 50-day MA of 0.93, and above the 200-day MA of 0.90, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 72.37 is Negative, neither overbought nor oversold. The STOCH value of 63.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SSY.

Sunlink Health Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SSY	52 Neutral	$8.17M	―	-22.34%	―	-12.45%	46.73%
Sector *	52 Neutral	$7.34B	-0.07	-63.86%	2.36%	16.17%	0.23%
BFRI	49 Neutral	$8.94M	―	-384.98%	―	14.27%	87.31%
TRIB	46 Neutral	$13.19M	―	77.20%	―	-4.02%	-6.60%
SINT	42 Neutral	$6.95M	―	-155.20%	―	9.90%	94.56%
PPBT	35 Underperform	$6.93M	―	-12.35%	―	―	71.57%

Sunlink Health Systems Corporate Events

Sunlink Declares Special Dividend Amid Merger Plans

SunLink Health Systems has entered into an Amended and Restated Agreement and Plan of Merger with Regional Health Properties, which was further amended on June 22, 2025, to extend the termination date to August 11, 2025. The merger will result in SunLink merging into Regional, with Regional surviving, and includes provisions for special cash dividends to SunLink shareholders, subject to certain conditions and adjustments. On July 18, 2025, SunLink’s Board declared a special cash dividend of $0.10 per share, payable on July 30, 2025, but reserved the right to revoke it if the merger is not approved or if certain conditions are not met. The merger’s completion is contingent upon customary closing conditions, including shareholder approvals and regulatory clearances.

Sunlink Health Systems Receives NYSE American Deficiency Notice

On July 3, 2025, SunLink Health Systems received a deficiency notice from NYSE American for not holding an annual stockholders meeting by June 30, 2025, as required. This notice does not immediately affect the company’s stock listing, which remains active with a compliance indicator. The notice also does not impact SunLink’s planned merger with Regional Health Properties, which is pending shareholder approval at a special meeting on July 29, 2025. If the merger is not completed by August 11, 2025, SunLink plans to hold its annual meeting by June 30, 2026, to regain compliance.

Sunlink Health Systems Extends Merger Agreement Deadline

SunLink Health Systems, Inc. and Regional Health Properties, Inc., both Georgia corporations, have entered into an amended merger agreement where SunLink will merge into Regional, with Regional as the surviving entity. On June 22, 2025, both companies agreed to extend the termination date of the merger agreement to August 11, 2025, due to outstanding shareholder approvals not being obtained by the original deadline of June 30, 2025. This extension allows for more time to secure necessary approvals, impacting the timeline and potential completion of the merger.