Extendicare (EXE) AI Stock Analysis

• Market Cap: C$1.09B
• Dividend Yield: 3.69%
• Average Volume (3M): 245.80K
• Price to Earnings (P/E): 14.6
• Beta (1Y): 0.69
• Revenue Growth: 12.36%
• EPS Growth: 123.26%
• Country: CA
• Employees: 23,500
• Sector: Healthcare
• Sector Strength: 78
• Industry: Medical - Care Facilities
• EPS (TTM): 0.89
• Shares Outstanding: 83,467,000
• 10 Day Avg. Volume: 185,130
• 30 Day Avg. Volume: 245,804
• PEG Ratio: 0.12
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.75
• Price to Cash Flow (P/CF): 15.60
• P/FCF Ratio: 65.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$13.25
• Price Target Upside: 1.53% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Extendicare demonstrates strong financial growth, effective cash management, and strategic focus on expansion. Despite operational efficiency challenges and high leverage, the company benefits from positive earnings sentiment and solid dividend returns. Technical indicators suggest short-term caution, but overall, the stock presents a compelling value proposition for investors.

Positive Factors

Demographics

EXE is expected to benefit from aging demographics and a sizable LTC waitlist in Ontario, which should drive demand tailwinds.

Financial Flexibility

A conservative financial profile with low debt ratios provides flexibility and potential for future acquisition activity.

Operating Metrics

Strong improvements in operating metrics within the LTC and home health businesses have led to leading price performance amongst Canadian seniors.

Negative Factors

Analyst Rating

Analyst's neutral rating reflects higher total returns expected elsewhere and a current preference for private-pay retirement residences.

Market Preference

Despite the positive aspects, there is currently a preference for companies with exposure to private-pay retirement residences.

Extendicare Business Overview & Revenue Model

Company Description

Extendicare Inc., through its subsidiaries, provides care and services for seniors in Canada. The company offers long term care (LTC) services; retirement living services; and home health care services, such as nursing care, occupational, physical and speech therapy, and assistance with daily activities, as well as contract and consulting services to third parties. It operates a network of 119 LTC homes and retirement communities, as well as home health care operations under the Extendicare, Esprit Lifestyle Communities, ParaMed, Extendicare Assist, and SGP Purchasing Partner Network brands. Extendicare Inc. was founded in 1968 and is based in Markham, Canada.

How the Company Makes Money

Extendicare generates revenue through several key streams. The primary source of income is its long-term care services, where the company receives funding from provincial governments for providing personal and medical care to residents in its facilities. Additionally, Extendicare earns from its home health care segment by offering nursing and personal support services to clients in their homes, funded through a combination of government contracts and private pay clients. The retirement living segment also contributes to revenue through rental income from its various retirement communities. Furthermore, Extendicare engages in strategic partnerships and alliances to enhance service delivery and optimize operational efficiencies, which can lead to cost savings and additional revenue opportunities.

Extendicare Financial Statement Overview

Summary

Extendicare exhibits strong revenue growth and improving net income margins, supported by effective cash flow generation. However, the company faces challenges with operational efficiency and high leverage. While the balance sheet reflects significant debt usage, the improved return on equity and positive cash flow trends are favorable indicators of financial health.

Income Statement

Extendicare has demonstrated strong revenue growth with a 12.39% increase from 2023 to 2024. The gross profit margin is robust at 100% for 2024 due to the accounting treatment, while the net profit margin improved significantly to 5.13% from 2.60% in 2023. The EBIT margin dropped to 0% in 2024, indicating operational challenges despite the revenue increase. Overall, profitability is improving but operational efficiency requires attention.

Balance Sheet

The company's debt-to-equity ratio remains high at 2.35, indicating significant leverage, although it has decreased from previous years. The return on equity has improved to 60.49% in 2024, showing better utilization of equity for generating profits. However, the equity ratio of 17.28% suggests a relatively low equity base compared to total assets, indicating a reliance on debt financing.

Cash Flow

Extendicare's free cash flow has turned positive in 2024, growing from a negative figure in 2023 to a strong positive figure, indicating improved cash generation. The operating cash flow to net income ratio is 1.91, showing efficient cash conversion from earnings. The free cash flow to net income ratio is 1.35, further reinforcing effective cash flow management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.47B	1.30B	1.22B	1.22B	1.16B
	Gross Profit
1.47B	118.43M	76.83M	151.72M	197.69M
	EBIT
0.00	62.96M	20.99M	56.62M	93.30M
	EBITDA
155.27M	98.63M	48.90M	67.46M	125.08M
	Net Income Common Stockholders
75.21M	33.98M	-4.51M	9.01M	42.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
121.85M	75.91M	167.28M	104.63M	179.96M
	Total Assets
719.79M	672.73M	781.58M	900.32M	963.13M
	Total Debt
292.49M	334.52M	383.97M	536.85M	564.60M
	Net Debt
170.64M	259.33M	216.69M	432.22M	384.64M
	Total Liabilities
595.44M	584.81M	680.88M	798.40M	834.94M
	Stockholders Equity
124.35M	87.92M	100.70M	101.92M	128.19M
Cash Flow		Free Cash Flow
101.69M	-106.13M	-2.92M	-6.10M	88.17M
	Operating Cash Flow
143.64M	23.28M	98.71M	63.42M	121.27M
	Investing Cash Flow
-9.11M	-84.45M	155.64M	-63.73M	2.00M
	Financing Cash Flow
-87.87M	-30.93M	-191.86M	-74.84M	-38.16M

Extendicare Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.05
• 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 TSE:EXE, the sentiment is Positive. The current price of 13.05 is above the 20-day moving average (MA) of 13.00, above the 50-day MA of 11.90, and above the 200-day MA of 9.62, indicating a bullish trend. The MACD of 0.32 indicates Positive momentum. The RSI at 65.84 is Neutral, neither overbought nor oversold. The STOCH value of 36.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EXE.

Extendicare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXE	74 Outperform	C$1.09B	14.56	70.86%	3.69%	12.36%	123.26%
SIA	61 Neutral	C$1.54B	33.29	8.99%	5.58%	13.72%	429.22%
KPT	59 Neutral	C$77.95M	31.98	3.53%	9.08%	―	―
Sector *	48 Neutral	$6.86B	1.11	-50.22%	2.47%	16.71%	1.53%

Extendicare Corporate Events

Extendicare Declares March 2025 Dividend

Extendicare Inc. has declared a cash dividend of C$0.042 per common share for March 2025, payable on April 15, 2025, to shareholders of record as of March 31, 2025. This announcement reflects Extendicare’s ongoing commitment to providing returns to its shareholders while maintaining its focus on delivering quality care services across Canada. The dividend designation as an ‘eligible dividend’ under the Income Tax Act (Canada) may have favorable tax implications for shareholders.

Extendicare Reports Strong Q4 2024 Results and Announces Dividend Increase

Extendicare reported a significant increase in adjusted EBITDA for the fourth quarter of 2024, driven by improvements across all business segments. The company completed several strategic initiatives, including acquiring LTC homes from Revera Inc., opening new facilities, and redeeming convertible debentures, which strengthened its financial position. The company also announced a 5% increase in its monthly dividend, reflecting its improved performance and growth prospects.

Extendicare Announces Board of Directors Changes

Extendicare Inc., a company listed on the Toronto Stock Exchange, has announced changes to its board of directors. Donald Clow and Heather-Anne Irwin have been appointed to the board, replacing Al Mawani who is retiring after seven years of service. These appointments bring the board back to nine directors. Clow brings extensive experience in the real estate sector, having held executive roles at Crombie REIT and other organizations, while Irwin has a strong background in finance and capital markets, currently serving on the boards of Artis REIT and the Ontario Financing Authority.

Extendicare Declares February 2025 Dividend, Reinforcing Shareholder Value

Extendicare Inc. has announced a C$0.04 cash dividend per common share for February 2025, payable on March 17, 2025, to shareholders recorded by February 28, 2025. This announcement signifies the company’s ongoing commitment to providing shareholder value and reflects its stable financial standing. The dividend, characterized as an ‘eligible dividend’ under Canadian tax law, underscores Extendicare’s strategic focus on maintaining consistent returns for investors while continuing to support the growing needs of the senior population through its extensive care and service operations.

Extendicare Declares C$0.04 January Dividend, Strengthening Investor Returns

Extendicare Inc. has declared a cash dividend of C$0.04 per common share for January 2025, payable to shareholders on February 14, 2025. This announcement reflects the company’s commitment to providing regular returns to its investors, reinforcing Extendicare’s stable financial strategy amidst its ongoing dedication to senior care services in Canada.

Extendicare to Release 2024 Q4 Financial Results and Host Conference Call

Extendicare has announced the release of its fourth quarter 2024 financial results on February 27, 2025, followed by a conference call on February 28, 2025, to discuss the outcomes. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and operational strategies, reinforcing its commitment to transparency and stakeholder engagement.