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Extendicare (TSE:EXE)
TSX:EXE
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Extendicare
(TSX:EXE)
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Rating:69Neutral
Price Target:
C$14.50
▲(1.75% Upside)
Extendicare's overall stock score reflects its solid financial performance, strategic growth initiatives, and fair valuation. The company's strong earnings call and attractive dividend yield further enhance its investment appeal. However, high leverage and challenges in certain segments pose risks that need to be managed.
Positive Factors
Revenue Growth
Consistent revenue growth indicates a stable demand for Extendicare's services, supporting long-term business sustainability and expansion.
Strategic Acquisitions
Strategic acquisitions enhance Extendicare's market position and capacity, driving future revenue growth and competitive advantage in the healthcare sector.
Improved Liquidity
Enhanced liquidity provides Extendicare with the financial flexibility to pursue growth opportunities and manage operational needs effectively.
Negative Factors
High Leverage
High leverage can increase financial risk and limit Extendicare's ability to invest in growth or weather economic downturns, impacting long-term stability.
Managed Services Segment Challenges
Challenges in the Managed Services segment could hinder overall profitability and growth, requiring strategic adjustments to mitigate revenue loss.
Low Net Profit Margin
A low net profit margin indicates potential inefficiencies or cost pressures, which could affect Extendicare's ability to generate sustainable profits.
Extendicare (EXE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.19B
Dividend Yield3.52%
Average Volume (3M)151.07K
Price to Earnings (P/E)14.5
Beta (1Y)0.60
Revenue Growth8.68%
EPS Growth39.93%
CountryCA
Employees23,500
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)0.37
Shares Outstanding83,817,900
10 Day Avg. Volume203,817
30 Day Avg. Volume151,075
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)7.20
Price to Sales (P/S)0.61
P/FCF Ratio8.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$16.12Price Target Upside13.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Extendicare Business Overview & Revenue Model
Company DescriptionExtendicare 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 MoneyExtendicare generates revenue primarily through its long-term care services, which include providing accommodation, meals, and healthcare services to residents in its facilities. The company also earns income through its retirement living operations, offering independent and assisted living arrangements. Another significant revenue stream comes from its home healthcare services, where Extendicare provides in-home nursing care, personal support, and therapy services. Additionally, Extendicare has partnerships and contracts with government entities and healthcare organizations that contribute to its financial performance. These partnerships often involve funding arrangements or service agreements that help stabilize revenue streams and support business growth.
Extendicare Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Positive
Extendicare reported robust growth and strategic expansion through acquisitions, which strengthened its position in the long-term and home care sectors. Despite some challenges such as increased operating costs due to seasonal factors and a decline in the Managed Services segment, the overall performance and future growth prospects indicate a positive outlook.Q2-2025 Updates
Positive Updates
Strong Organic Growth and Improved Margins
Adjusted EBITDA increased to $39.8 million, up 3% over the prior year. Excluding out-of-period items, adjusted EBITDA increased by 15.4% with home health care leading the way. Average daily volumes were up 10.9% from the prior year, and NOI margin improved by 90 basis points to 13.5%.
Strategic Acquisitions and Expansion
Extendicare closed the acquisition of 9 Class C long-term care homes and a parcel of land for $41.9 million, adding 822 long-term care beds and 574 private pay retirement beds. Additionally, the acquisition of Closing the Gap for $75.1 million added more than 1,200 caregivers and 1.1 million service hours to the home health segment.
Increase in AFFO and Dividend Payout Ratio
AFFO increased to $0.29 per share, up 23.1% year-over-year, with a dividend payout ratio of 46% on a trailing 12-month basis.
Enhanced Liquidity Position
Senior secured credit facility increased by $100 million, leaving Extendicare in a strong liquidity position with $152 million available on the revolver and $73 million cash on hand at quarter end.
Negative Updates
Impact of Easter on Operating Costs
Higher operating costs were noted across all segments due to the Easter holiday impacting the second quarter, affecting margins unfavorably by approximately 40 basis points in the Long-Term Care segment.
Challenges in Managed Services Segment
Revenue and NOI in the Managed Services segment declined, reflecting the loss of management fees due to the sale of 30 homes by Revera, with 9 of those homes acquired by Extendicare.
Company Guidance
During Extendicare Inc.'s second quarter 2025 conference call, the company provided guidance reflecting strong financial performance and strategic growth initiatives. Adjusted EBITDA increased by 3% to $39.8 million compared to the prior year, with a significant 15.4% rise when excluding out-of-period items, largely driven by a 10.9% increase in average daily volumes in the home health care segment. The company reported a net operating income (NOI) margin improvement of 90 basis points to 13.5%, attributed to efficient capital allocation and scalable back-office operations. Extendicare highlighted notable acquisitions, including the purchase of nine long-term care homes from Revera, adding 822 beds with an expected annualized NOI contribution of $13 million. Additionally, the acquisition of Closing the Gap for $75.1 million is anticipated to contribute $9.8 million in annualized NOI. The company's available liquidity position was strengthened with an increase in its senior secured credit facility by $100 million, maintaining a favorable position for future strategic acquisitions. Moreover, Extendicare mentioned ongoing redevelopment projects and a new capital funding policy by the Ontario government, which provides greater funding flexibility for long-term care home construction. These efforts align with Extendicare's commitment to expanding long-term care capacity in response to demographic demand, while maintaining a dividend payout ratio of 46% and an AFFO increase of 23.1% year-over-year to $0.29 per share.Extendicare Financial Statement Overview
Summary
Extendicare demonstrates solid financial performance with consistent revenue growth and strong operational margins. The company effectively generates returns on equity, but the high leverage poses potential risks. Cash flow metrics are positive, reflecting good cash management. Overall, Extendicare is in a stable financial position with opportunities to enhance profitability and reduce leverage.Income Statement
Extendicare has shown consistent revenue growth, with a TTM revenue growth rate of 2.37%. The company maintains a strong gross profit margin of 77.05% in the TTM period, indicating efficient cost management. However, the net profit margin is relatively low at 5.23%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are stable, reflecting solid operational performance.72
Positive
Balance Sheet
The balance sheet shows a high debt-to-equity ratio of 2.29 in the TTM period, indicating significant leverage, which could pose financial risks. However, the return on equity is strong at 65.66%, demonstrating effective use of equity to generate profits. The equity ratio is relatively low, suggesting a reliance on debt financing.60
Neutral
Cash Flow
Extendicare's cash flow performance is robust, with a positive free cash flow growth rate of 5.79% in the TTM period. The operating cash flow to net income ratio is 0.44, indicating that operating cash flows are adequately covering net income. The free cash flow to net income ratio of 0.61 suggests efficient cash conversion from profits.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.51B | 1.47B | 1.30B | 1.22B | 1.17B | 1.10B |
| Gross Profit | 1.16B | 168.00M | 167.62M | 76.83M | 115.61M | 201.16M |
| EBITDA | 165.43M | 155.27M | 98.63M | 48.90M | 67.46M | 125.08M |
| Net Income | 83.18M | 75.21M | 33.98M | 69.55M | 11.50M | 54.19M |
Balance Sheet | ||||||
| Total Assets | 777.83M | 719.79M | 672.73M | 781.58M | 900.32M | 963.13M |
| Cash, Cash Equivalents and Short-Term Investments | 72.61M | 121.85M | 75.91M | 167.28M | 104.63M | 179.96M |
| Total Debt | 284.12M | 292.49M | 334.52M | 383.97M | 536.85M | 564.60M |
| Total Liabilities | 628.92M | 595.44M | 584.81M | 680.88M | 798.40M | 834.94M |
| Stockholders Equity | 148.91M | 124.35M | 87.92M | 100.70M | 101.92M | 128.19M |
Cash Flow | ||||||
| Free Cash Flow | 78.93M | 101.69M | -106.13M | -2.76M | -6.10M | 88.17M |
| Operating Cash Flow | 131.43M | 143.64M | 23.28M | 98.87M | 59.08M | 121.27M |
| Investing Cash Flow | -105.66M | -9.11M | -84.45M | 155.64M | -59.39M | 2.00M |
| Financing Cash Flow | -89.56M | -87.87M | -30.93M | -191.86M | -74.84M | -38.16M |
Extendicare Technical Analysis
Positive
14.25
Price Trends
13.05
Positive
13.52
Positive
12.48
Positive
Market Momentum
0.24
Negative
71.82
Negative
91.47
Negative
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 14.25 is above the 20-day moving average (MA) of 13.30, above the 50-day MA of 13.05, and above the 200-day MA of 12.48, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 71.82 is Negative, neither overbought nor oversold. The STOCH value of 91.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EXE.
Extendicare Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | C$1.19B | 14.49 | 65.09% | 3.52% | 8.68% | 39.93% | |
59 Neutral | 269.31M | 2.09 | 105.57% | 2.49% | -35.35% | 948.72% | |
59 Neutral | 1.67B | 45.36 | 5.55% | 5.09% | 10.13% | 1.30% | |
53 Neutral | 206.22M | -115.88 | -2.09% | 0.58% | -0.16% | 75.25% | |
46 Neutral | 1.29B | -9.74 | -15.57% | ― | 20.36% | -186.10% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
Performance Comparison
TSE:EXE
Extendicare
14.41
5.40
59.93%
TSE:CRRX
CareRx
3.43
1.56
83.42%
TSE:SIA
Sienna Senior Living
18.39
2.43
15.23%
MFCSF
Medical Facilities
10.25
0.45
4.59%
TSE:WELL
WELL Health Technologies Corp
5.03
0.60
13.54%
Extendicare Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Extendicare Reports Strong Q2 2025 Results and Strategic Acquisitions
Positive
Aug 6, 2025
Extendicare Inc. reported a 15.4% increase in adjusted EBITDA for Q2 2025, driven by growth in its home health care segment and improvements in long-term care, including the acquisition of nine Class C LTC homes. The company completed several strategic transactions, including the sale of three LTC projects and the acquisition of Closing the Gap, which is expected to enhance its service offerings and operational scale. These moves, along with increased credit facilities, position Extendicare for future growth and improved market positioning.
The most recent analyst rating on (TSE:EXE) stock is a Hold with a C$11.00 price target. To see the full list of analyst forecasts on Extendicare stock, see the TSE:EXE Stock Forecast page.
Dividends
Extendicare Declares July 2025 Dividend of C$0.042 per Share
Positive
Jul 15, 2025
Extendicare Inc. has declared a cash dividend of C$0.042 per common share for July 2025, payable on August 15, 2025, to shareholders of record as of July 31, 2025. This announcement reflects the company’s ongoing commitment to returning value to its shareholders, reinforcing its stable financial position and dedication to maintaining investor confidence.
The most recent analyst rating on (TSE:EXE) stock is a Hold with a C$11.00 price target. To see the full list of analyst forecasts on Extendicare stock, see the TSE:EXE Stock Forecast page.
Financial Disclosures
Extendicare Schedules Q2 2025 Financial Results Release and Conference Call
Neutral
Jul 7, 2025
Extendicare Inc. announced the release of its second quarter 2025 financial results scheduled for August 6, 2025, followed by a conference call on August 7, 2025, led by its top executives. This announcement is part of Extendicare’s ongoing communication strategy with stakeholders, reflecting its commitment to transparency and engagement in the senior care industry.
The most recent analyst rating on (TSE:EXE) stock is a Hold with a C$11.00 price target. To see the full list of analyst forecasts on Extendicare stock, see the TSE:EXE Stock Forecast page.
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Extendicare Expands with Acquisition and Credit Facility Increase
Positive
Jul 2, 2025
Extendicare has completed the acquisition of Closing the Gap Healthcare Group through its subsidiary ParaMed Inc., enhancing its capabilities in rehabilitation services and integrated care models. This acquisition, valued at $75.5 million with potential earnouts, is expected to strengthen Extendicare’s home healthcare platform. Additionally, Extendicare has increased its Senior Secured Credit Facility to $375 million, positioning itself for further strategic acquisitions and growth, supported by a $100 million increase in its credit facilities.
The most recent analyst rating on (TSE:EXE) stock is a Hold with a C$11.00 price target. To see the full list of analyst forecasts on Extendicare stock, see the TSE:EXE Stock Forecast page.
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.