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Extendicare
(TSX:EXE)
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Rating:62Neutral
Price Target:
C$36.00
▼(-5.04% Downside)
Action:Reiterated
Date:08/07/26
The score is driven primarily by a solid fundamental rebound and improved balance-sheet profile, reinforced by a constructive earnings call highlighting strong growth and better financing/liquidity. These positives are tempered by weak cash-flow conversion and notably bearish technical momentum, while valuation remains only moderately supportive given the higher P/E and modest yield.
Positive Factors
Materially improved balance sheet and lower leverage
Leverage falling materially to ~0.9x and a stronger equity base enhances financial flexibility over the medium term. This reduces refinancing and covenant risk, supports capital allocation for redevelopments and M&A, and improves resilience to interest-rate or reimbursement shocks.
Negative Factors
Weak and volatile free cash flow conversion
Subpar cash conversion and historical FCF volatility constrain internal funding for capex, redevelopments, dividends and deleveraging. Persistent working-capital timing effects and recurring declines reduce the cushion provided by reported earnings and can force external financing under stress.
Read all positive and negative factors
Positive Factors
Negative Factors
Materially improved balance sheet and lower leverage
Leverage falling materially to ~0.9x and a stronger equity base enhances financial flexibility over the medium term. This reduces refinancing and covenant risk, supports capital allocation for redevelopments and M&A, and improves resilience to interest-rate or reimbursement shocks.
Read all positive factors
Extendicare (EXE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$3.08B
Dividend Yield1.58%
Average Volume (3M)175.59K
Price to Earnings (P/E)23.6
Beta (1Y)0.41
Revenue Growth31.14%
EPS Growth34.48%
CountryCA
Employees23,500
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)1.38
Shares Outstanding95,046,400
10 Day Avg. Volume108,359
30 Day Avg. Volume175,588
Financial Highlights & Ratios
PEG Ratio1.15
Price to Book (P/B)4.88
Price to Sales (P/S)1.10
P/FCF Ratio28.76
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$38.75Price Target Upside2.22% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.53
Revenue Forecast (FY)C$2.28B
Extendicare Business Overview & Revenue Model
Company Description
Extendicare Inc. operates across Canada, delivering a wide array of vital care and support services specifically designed for the senior population through its various subsidiaries. The company's diverse service portfolio includes long-term care f...
How the Company Makes Money
Extendicare makes money primarily by delivering funded care services in two main areas: (1) Long-term care (LTC): It earns revenue from operating LTC homes where residents receive accommodation and care. Revenue is generated through a mix of gover...
Extendicare Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a positive operational and financial trajectory: very strong revenue and adjusted EBITDA growth driven by the CBI acquisition and outsized home health volume expansion, improved liquidity and an upgraded unsecured capital structure, and redevelopment progress. These positives are tempered by near-term margin pressure in home health from necessary back-office and technology investments, one-time financing and transaction costs (including DSU settlement) that reduced reported net earnings and AFFO in the quarter, and ongoing integration work with associated costs and timing uncertainty. Management expects medium-term margin expansion and achievable synergies, and pro forma leverage and liquidity position the company well for execution.Positive Updates
Strong Top-Line and EBITDA Growth
Consolidated Q2 revenue increased 59.4% year-over-year to $611.0 million. Adjusted EBITDA rose to $68.3 million, up $28.5 million or 71.7% versus prior year, driven by acquisitions and organic growth.
Negative Updates
Home Health Margin Compression
Home health NOI margins declined ~60 basis points year-over-year to 12.9%, primarily due to incremental investments in technology and back-office headcount to support rapid organic growth and the absence of a 2026 Ontario rate increase.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Top-Line and EBITDA Growth
Consolidated Q2 revenue increased 59.4% year-over-year to $611.0 million. Adjusted EBITDA rose to $68.3 million, up $28.5 million or 71.7% versus prior year, driven by acquisitions and organic growth.
Read all positive updates
Company Guidance
Management guided that the business is shifting from transaction execution to disciplined integration and organic scaling, targeting long‑run home‑health volume growth of ~6%–8% annually (driven by ~4% demographic growth) while expecting SGP margins of ~50%–55% and long‑term care (LTC) trailing 12‑month NOI margins near 11.8%; Q2 pro forma metrics included consolidated revenue of $611M (+59.4% YoY), adjusted EBITDA $68.3M (+71.7%), pro forma net debt/adjusted EBITDA ~2.5x, and liquidity of $208M ($93M cash + $115M revolver); CBI contributed Q2 revenue $146M, adjusted EBITDA $18.5M, ADV 33.6k (~12M hours run‑rate, ~20% ahead of 2024) and ~$19.5M NOI, while home‑health volumes grew 133% YoY (excluding CBI ADV +31.7%) and home‑health NOI margin was down 60 bps to 12.9% (trailing 12‑month >13%); Q2 net earnings were $30.9M (adjusted $36.4M, $0.38 basic) and AFFO was $36.5M (adjusted $42.9M, $0.48/share, +52.9% YoY) with a trailing‑12‑month payout ratio of 37%; balance‑sheet actions included $450M 5‑yr senior unsecured notes at 4.345% (DBRS BBB), a new $250M unsecured facility (maturing Apr‑2029), a lower WACC profile (avg. interest down 80 bps to 4.4%, avg. term 5.1 yrs), targeted integration synergies of ~$7.4M (integration ~18–24 months, integration spend ~$3–4M/yr), and a redevelopment pipeline of 6 projects under construction (Beauclair 320 beds opened, Forest Trail 256 beds next month), 4 homes (832 beds) expected in 2027 and 17 projects in planning.Extendicare Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.75B | 1.66B | 1.47B | 1.30B | 1.22B | 1.17B |
| Gross Profit | 553.60M | 199.59M | 168.00M | 167.62M | 76.83M | 115.61M |
| EBITDA | 205.13M | 175.61M | 155.27M | 98.63M | 48.90M | 67.46M |
| Net Income | 122.36M | 96.66M | 75.21M | 33.98M | 69.55M | 11.50M |
Balance Sheet | ||||||
| Total Assets | 1.07B | 1.07B | 719.79M | 672.73M | 781.58M | 900.32M |
| Cash, Cash Equivalents and Short-Term Investments | 322.27M | 349.18M | 121.85M | 75.91M | 167.28M | 104.63M |
| Total Debt | 324.56M | 342.93M | 292.49M | 334.52M | 383.97M | 536.85M |
| Total Liabilities | 678.09M | 693.14M | 595.44M | 584.81M | 680.88M | 798.40M |
| Stockholders Equity | 393.16M | 373.37M | 124.35M | 87.92M | 100.70M | 101.92M |
Cash Flow | ||||||
| Free Cash Flow | 49.25M | 63.40M | 101.69M | -106.13M | -2.76M | -6.10M |
| Operating Cash Flow | 143.17M | 165.21M | 143.64M | 23.28M | 98.87M | 59.08M |
| Investing Cash Flow | -109.74M | -119.02M | -9.11M | -84.45M | 155.64M | -59.39M |
| Financing Cash Flow | 178.26M | 180.43M | -87.87M | -30.93M | -191.86M | -74.84M |
Extendicare Technical Analysis
Neutral
37.91
Price Trends
35.07
Negative
32.31
Positive
27.04
Positive
Market Momentum
-0.58
Positive
29.96
Positive
17.68
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EXE, the sentiment is Neutral. The current price of 37.91 is above the 20-day moving average (MA) of 36.46, above the 50-day MA of 35.07, and above the 200-day MA of 27.04, indicating a neutral trend. The MACD of -0.58 indicates Positive momentum. The RSI at 29.96 is Positive, neither overbought nor oversold. The STOCH value of 17.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:EXE.
Extendicare Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$213.86M | 7.83 | 25.79% | 2.37% | 2.96% | ― | |
62 Neutral | C$3.08B | 23.55 | 45.35% | 1.35% | 31.14% | 34.48% | |
62 Neutral | C$246.11M | 8.49 | 51.33% | 2.01% | 2.64% | -56.04% | |
54 Neutral | C$2.42B | 41.58 | 6.58% | 4.08% | 16.11% | 31.75% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
TSE:EXE
Extendicare
32.50
19.25
145.30%
TSE:CRRX
CareRx
3.36
0.48
16.50%
TSE:SIA
Sienna Senior Living
21.62
3.50
19.33%
TSE:DR
Medical Facilities
15.15
0.78
5.41%
Extendicare Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
Extendicare’s Q2 Earnings Surge as Home Health Acquisitions Boost Growth
Positive
Aug 6, 2026
Extendicare reported a 71.7% year-over-year jump in adjusted EBITDA to $68.3 million in the second quarter of 2026, driven by the completed acquisitions of CBI Home Health and Closing the Gap, strong organic growth in home health volumes, and expa...
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.