As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the senior health, home health & hospice industry, including The Pennant Group (NASDAQ:PNTG) and its peers.
The senior health, home care, and hospice care industries provide essential services to aging populations and patients with chronic or terminal conditions. These companies benefit from stable, recurring revenue driven by relationships with patients and families that can extend many months or even years. However, the labor-intensive nature of the business makes it vulnerable to rising labor costs and staffing shortages, while profitability is constrained by reimbursement rates from Medicare, Medicaid, and private insurers. Looking ahead, the industry is positioned for tailwinds from an aging population, increasing chronic disease prevalence, and a growing preference for personalized in-home care. Advancements in remote monitoring and telehealth are expected to enhance efficiency and care delivery. However, headwinds such as labor shortages, wage inflation, and regulatory uncertainty around reimbursement could pose challenges. Investments in digitization and technology-driven care will be critical for long-term success.
The 7 senior health, home health & hospice stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.3%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
The Pennant Group (NASDAQ:PNTG)
Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group (NASDAQ:PNTG) operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.
The Pennant Group reported revenues of $209.8 million, up 33.7% year on year. This print exceeded analysts’ expectations by 4.1%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ EPS estimates and a narrow beat of analysts’ sales volume estimates.
“We are off to a strong start in 2025,” said Brent Guerisoli, the Company’s Chief Executive Officer.
The Pennant Group pulled off the fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 16.5% since reporting and currently trades at $22.46.
Is now the time to buy The Pennant Group? Access our full analysis of the earnings results here, it’s free.
Best Q1: BrightSpring Health Services (NASDAQ:BTSG)
Founded in 1974, BrightSpring Health Services (NASDAQ:BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.
BrightSpring Health Services reported revenues of $2.88 billion, up 11.7% year on year, outperforming analysts’ expectations by 4.6%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
BrightSpring Health Services scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 13.6% since reporting. It currently trades at $20.33.
Is now the time to buy BrightSpring Health Services? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Brookdale (NYSE:BKD)
With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE:BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.
Brookdale reported revenues of $813.9 million, up 4% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 12.5% since the results and currently trades at $7.64.
Read our full analysis of Brookdale’s results here.
Option Care Health (NASDAQ:OPCH)
With a nationwide network of 177 locations serving 43 states and a team of over 4,500 clinicians, Option Care Health (NASDAQ:OPCH) is the largest independent provider of home and alternate site infusion services, delivering medications and clinical support to patients across the United States.
Option Care Health reported revenues of $1.33 billion, up 16.3% year on year. This print beat analysts’ expectations by 6.1%. It was a very strong quarter as it also recorded a solid beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
Option Care Health achieved the biggest analyst estimates beat among its peers. The stock is down 6.2% since reporting and currently trades at $30.92.
Read our full, actionable report on Option Care Health here, it’s free.
Chemed (NYSE:CHE)
With a unique business model combining end-of-life care and household services, Chemed (NYSE:CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.
Chemed reported revenues of $646.9 million, up 9.8% year on year. This result topped analysts’ expectations by 0.8%. Overall, it was a satisfactory quarter as it also put up a decent beat of analysts’ EPS estimates.
The stock is down 22.8% since reporting and currently trades at $452.87.
Read our full, actionable report on Chemed here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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