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4 Outpatient Home Health Stocks Worth Watching Amid Shifting Trends
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The Zacks Medical - Outpatient and Home Healthcare industry has been witnessing a rapid shift toward digital healthcare treatment. In the past few years, there has been a significant rise in demand for telemedicine-focused online medical and artificial intelligence (AI)-powered technology services. The rising elderly global population is necessitating many healthcare companies that were traditionally not technology-based to provide technology-enabled services to survive in the market. Per a report by Grand View Research, the global home healthcare market was valued at $416.4 billion in 2024 and is anticipated to reach $747.70 billion by 2030 at a CAGR of approximately 10.2%. Another factor prompting these MedTech players to embrace digital healthcare is the skyrocketing healthcare costs.
On a positive note, rising dependence on telehealth and AI is likely to help the industry thrive in the near term. Quest Diagnostics Incorporated (DGX - Free Report) , DaVita Inc. (DVA - Free Report) , Addus HomeCare Corporation (ADUS - Free Report) and The Pennant Group, Inc. (PNTG - Free Report) are likely to gain from the prospects.
Industry Description
The industry comprises companies that offer ambulatory care in an outpatient setting or at home. They use advanced medical technologies for diagnosis, treatment and rehabilitation services. The players include operators of HMO medical centers, kidney dialysis centers and other outpatient care centers. After navigating a tough pandemic era, the payers and providers have been seeing steady growth on the back of innovation in services. This buoys optimism about prospects over the next few years, although persistent inflation in consumer prices could dent the outlook. The potential for scaling up innovation, prompted by the pandemic’s pressure on the healthcare system, is an added plus. Also, the acceleration of value-based care models and the increasing application of technology across the healthcare industry are likely to continue in the long run.
Major Trends Shaping the Future of the Outpatient and Home Healthcare Industry
Aging Population: One of the primary drivers of the home healthcare market is the aging global population. As people live longer, there is a growing demand for services that cater to chronic disease management, rehabilitation and daily living assistance. The rising elderly population is expected to fuel the need for home healthcare services. As people age, they naturally tend to prefer healthcare services in the familiar and comfortable setting of their homes.
Cost Effectiveness: The primary advantage of outpatient clinics is cost-effectiveness. Outpatient medical care clinics do not retain patients for long hours (overnight) or charge exorbitantly. Modern-day outpatient clinics offer a broad spectrum of treatment and diagnostic options and even minor surgical procedures. Financial incentives like health plans and government program payment policies supporting services in lower-cost care settings have also been driving outpatient care.
Additionally, reduced rates of emergency room visits, readmissions and hospitalizations among patients receiving home-based care further increase healthcare savings by preventing expensive and preventable accidents.
AI’s Dominant Role: AI has been a roaring success in healthcare, as it helps enhance patient care through remote monitoring. AI-powered medical devices continuously monitor patients’ health conditions and transfer this data to healthcare providers. AI’s analytical capabilities allow healthcare providers to respond quickly by analyzing patient data and detecting changes in patients’ conditions. This further helps in timely intervention and reduces hospital readmissions. In addition, AI could make it much easier for caregivers, providers and patients to manage complex home care plans. By coordinating caregiver activities and automatically scheduling doctors’ appointments, AI can streamline care management.
Technological Advancements: Virtual assistants and chatbots can help patients by answering questions about their care and connecting them with the information they need to make more informed decisions about their care. Increasingly, they will interface with electronic health records systems and be used to book and schedule appointments. They can also help patients stay compliant by reminding them to take medications or exercise.
Home healthcare can gain from the benefits provided by Medicare (and several other payers), which comprise a broad range of services that can be delivered in a patient’s home, including post-operative and chronic wound care. Home healthcare has seen a surge in the utilization of the telehealth platform in response to the pandemic. With a rise in the elderly population and the increasing costs of in-person health care, the demand for home-based health care is on the rise. People with chronic illnesses and disabilities also require home-based care.
Staffing Shortages: The U.S. healthcare industry has been experiencing a severe shortage of workers at every level. Among support personnel, there is a laxity of home health aides. The increasing international migration of health workers may aggravate health workforce shortfalls, especially in low-income and lower-middle-income countries. Another reason for the acute staffing shortage is high burnout resulting from o physical, emotional and mental exhaustion. Thus, these overworked employees are leaving the profession at an accelerating rate.
Zacks Industry Rank
The Zacks Medical - Outpatient and Home Healthcare industry falls within the broader Zacks Medical sector. It has a Zacks Industry Rank #151, which places it in the bottom 39% of nearly 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dismal near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few outpatient home health stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry's Stock Market Performance
The industry has outperformed its sector, but underperformed the S&P 500 Composite in the past year.
The industry has lost 0.5% over this period compared with the S&P 500’s rise of 18.2% and the broader sector’s decline of 16.3%.
One Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings (P/E), commonly used for valuing medical stocks, the industry is currently trading at 19.6X compared with the S&P 500’s 23.4X and the sector’s 19.2X.
Over the last five years, the industry has traded as high as 24.6X and as low as 16.6X, with the median being at 20X, as the charts below show.
Price-to-Earnings Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
Price-to-Earnings Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
4 Outpatient and Home Healthcare Stocks to Watch Now
Quest Diagnostics: Quest Diagnostics, a well-known diagnostic information services provider, announced a first-of-its-kind collaboration designed to streamline and improve experiences for healthcare providers and patients that engage DGX for laboratory testing in the United States this month. In August, Quest Diagnostics signed a definitive agreement with Corewell Health to enter a joint venture to expand access to innovative, quality and affordable laboratory services in Michigan. DGX carries a Zacks Rank #3 (Hold).
For this Secaucus, NJ-based company, the Zacks Consensus Estimate for 2025 revenues suggests growth of 9.9%. The same for earnings indicates an increase of 9.1%.
Image Source: Zacks Investment Research
The company’s return on equity (ROE) of 15.2% compares favorably with the industry’s 8.8%.
DaVita: DaVita, a renowned global comprehensive kidney care provider, reported its second-quarter 2025 results in August. The company registered an uptick in its top and bottom lines and revenue per treatment. The per-day increase in total U.S. dialysis treatments for the second quarter on a sequential basis and solid revenues from both sources were also recorded during the quarter. The opening and acquiring of dialysis centers within the United States and acquiring centers overseas were also seen. DVA carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For this Denver, CO-based company, the Zacks Consensus Estimate for 2025 revenues suggests growth of 5%. The same for earnings indicates an increase of 12.9%.
Image Source: Zacks Investment Research
The company’s ROE of 369.4% compares favorably with the industry’s 8.8%.
Addus HomeCare: Addus HomeCare, a key provider of home care services, announced its second-quarter 2025 results in August. The company registered a solid uptick in its net service revenues and both segmental revenues. ADUS’ personal care segment was a key contributor to its growth with an organic revenue increase on a same-store basis year over year. These results were driven by volume growth, as well as the support of state rate increases, including those in Illinois. Addus HomeCare’s hospice care segment witnessed improving trends in the quarter, with each of average daily census, patient days and revenue per patient day moving higher year over year. ADUS presently carries a Zacks Rank of 3.
For this Frisco, TX-based company, the Zacks Consensus Estimate for 2025 revenues suggests growth of 21.5%. The same for earnings indicates an increase of 16.5%.
Image Source: Zacks Investment Research
The company’s ROE of 9.4% compares favorably with the industry’s 8.8%.
The Pennant Group: It is the parent company of the Pennant group of affiliated home health, hospice and senior living companies. This month, The Pennant Group announced that effective Sept. 1, 2025, it has acquired a premier home health agency and outpatient therapy operation in Wyoming. In August, the company reported its second-quarter 2025 results, where it witnessed solid improvement in its overall top line. Its Home Health and Hospice Services and Senior Living Services segments recorded a robust uptick in revenues. The company also recorded strength in its total home health admissions and total Medicare home health admissions. The uptick in total hospice admissions and the Hospice average daily census in the second quarter was also impressive. PNTG carries a Zacks Rank of 3.
For this Eagle, ID-based company, the Zacks Consensus Estimate for 2025 revenues suggests growth of 26.5%. The same for earnings indicates an increase of 21.3%.
Image Source: Zacks Investment Research
The company’s ROE of 9.9% compares favorably with the industry’s 8.8%.
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4 Outpatient Home Health Stocks Worth Watching Amid Shifting Trends
The Zacks Medical - Outpatient and Home Healthcare industry has been witnessing a rapid shift toward digital healthcare treatment. In the past few years, there has been a significant rise in demand for telemedicine-focused online medical and artificial intelligence (AI)-powered technology services. The rising elderly global population is necessitating many healthcare companies that were traditionally not technology-based to provide technology-enabled services to survive in the market. Per a report by Grand View Research, the global home healthcare market was valued at $416.4 billion in 2024 and is anticipated to reach $747.70 billion by 2030 at a CAGR of approximately 10.2%. Another factor prompting these MedTech players to embrace digital healthcare is the skyrocketing healthcare costs.
On a positive note, rising dependence on telehealth and AI is likely to help the industry thrive in the near term. Quest Diagnostics Incorporated (DGX - Free Report) , DaVita Inc. (DVA - Free Report) , Addus HomeCare Corporation (ADUS - Free Report) and The Pennant Group, Inc. (PNTG - Free Report) are likely to gain from the prospects.
Industry Description
The industry comprises companies that offer ambulatory care in an outpatient setting or at home. They use advanced medical technologies for diagnosis, treatment and rehabilitation services. The players include operators of HMO medical centers, kidney dialysis centers and other outpatient care centers. After navigating a tough pandemic era, the payers and providers have been seeing steady growth on the back of innovation in services. This buoys optimism about prospects over the next few years, although persistent inflation in consumer prices could dent the outlook. The potential for scaling up innovation, prompted by the pandemic’s pressure on the healthcare system, is an added plus. Also, the acceleration of value-based care models and the increasing application of technology across the healthcare industry are likely to continue in the long run.
Major Trends Shaping the Future of the Outpatient and Home Healthcare Industry
Aging Population: One of the primary drivers of the home healthcare market is the aging global population. As people live longer, there is a growing demand for services that cater to chronic disease management, rehabilitation and daily living assistance. The rising elderly population is expected to fuel the need for home healthcare services. As people age, they naturally tend to prefer healthcare services in the familiar and comfortable setting of their homes.
Cost Effectiveness: The primary advantage of outpatient clinics is cost-effectiveness. Outpatient medical care clinics do not retain patients for long hours (overnight) or charge exorbitantly. Modern-day outpatient clinics offer a broad spectrum of treatment and diagnostic options and even minor surgical procedures. Financial incentives like health plans and government program payment policies supporting services in lower-cost care settings have also been driving outpatient care.
Additionally, reduced rates of emergency room visits, readmissions and hospitalizations among patients receiving home-based care further increase healthcare savings by preventing expensive and preventable accidents.
AI’s Dominant Role: AI has been a roaring success in healthcare, as it helps enhance patient care through remote monitoring. AI-powered medical devices continuously monitor patients’ health conditions and transfer this data to healthcare providers. AI’s analytical capabilities allow healthcare providers to respond quickly by analyzing patient data and detecting changes in patients’ conditions. This further helps in timely intervention and reduces hospital readmissions. In addition, AI could make it much easier for caregivers, providers and patients to manage complex home care plans. By coordinating caregiver activities and automatically scheduling doctors’ appointments, AI can streamline care management.
Technological Advancements: Virtual assistants and chatbots can help patients by answering questions about their care and connecting them with the information they need to make more informed decisions about their care. Increasingly, they will interface with electronic health records systems and be used to book and schedule appointments. They can also help patients stay compliant by reminding them to take medications or exercise.
Home healthcare can gain from the benefits provided by Medicare (and several other payers), which comprise a broad range of services that can be delivered in a patient’s home, including post-operative and chronic wound care. Home healthcare has seen a surge in the utilization of the telehealth platform in response to the pandemic. With a rise in the elderly population and the increasing costs of in-person health care, the demand for home-based health care is on the rise. People with chronic illnesses and disabilities also require home-based care.
Staffing Shortages: The U.S. healthcare industry has been experiencing a severe shortage of workers at every level. Among support personnel, there is a laxity of home health aides. The increasing international migration of health workers may aggravate health workforce shortfalls, especially in low-income and lower-middle-income countries. Another reason for the acute staffing shortage is high burnout resulting from o physical, emotional and mental exhaustion. Thus, these overworked employees are leaving the profession at an accelerating rate.
Zacks Industry Rank
The Zacks Medical - Outpatient and Home Healthcare industry falls within the broader Zacks Medical sector. It has a Zacks Industry Rank #151, which places it in the bottom 39% of nearly 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dismal near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few outpatient home health stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry's Stock Market Performance
The industry has outperformed its sector, but underperformed the S&P 500 Composite in the past year.
The industry has lost 0.5% over this period compared with the S&P 500’s rise of 18.2% and the broader sector’s decline of 16.3%.
One Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings (P/E), commonly used for valuing medical stocks, the industry is currently trading at 19.6X compared with the S&P 500’s 23.4X and the sector’s 19.2X.
Over the last five years, the industry has traded as high as 24.6X and as low as 16.6X, with the median being at 20X, as the charts below show.
Price-to-Earnings Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
Price-to-Earnings Forward Twelve Months (F12M)
Image Source: Zacks Investment Research
4 Outpatient and Home Healthcare Stocks to Watch Now
Quest Diagnostics: Quest Diagnostics, a well-known diagnostic information services provider, announced a first-of-its-kind collaboration designed to streamline and improve experiences for healthcare providers and patients that engage DGX for laboratory testing in the United States this month. In August, Quest Diagnostics signed a definitive agreement with Corewell Health to enter a joint venture to expand access to innovative, quality and affordable laboratory services in Michigan. DGX carries a Zacks Rank #3 (Hold).
For this Secaucus, NJ-based company, the Zacks Consensus Estimate for 2025 revenues suggests growth of 9.9%. The same for earnings indicates an increase of 9.1%.
Image Source: Zacks Investment Research
The company’s return on equity (ROE) of 15.2% compares favorably with the industry’s 8.8%.
DaVita: DaVita, a renowned global comprehensive kidney care provider, reported its second-quarter 2025 results in August. The company registered an uptick in its top and bottom lines and revenue per treatment. The per-day increase in total U.S. dialysis treatments for the second quarter on a sequential basis and solid revenues from both sources were also recorded during the quarter. The opening and acquiring of dialysis centers within the United States and acquiring centers overseas were also seen. DVA carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For this Denver, CO-based company, the Zacks Consensus Estimate for 2025 revenues suggests growth of 5%. The same for earnings indicates an increase of 12.9%.
Image Source: Zacks Investment Research
The company’s ROE of 369.4% compares favorably with the industry’s 8.8%.
Addus HomeCare: Addus HomeCare, a key provider of home care services, announced its second-quarter 2025 results in August. The company registered a solid uptick in its net service revenues and both segmental revenues. ADUS’ personal care segment was a key contributor to its growth with an organic revenue increase on a same-store basis year over year. These results were driven by volume growth, as well as the support of state rate increases, including those in Illinois. Addus HomeCare’s hospice care segment witnessed improving trends in the quarter, with each of average daily census, patient days and revenue per patient day moving higher year over year. ADUS presently carries a Zacks Rank of 3.
For this Frisco, TX-based company, the Zacks Consensus Estimate for 2025 revenues suggests growth of 21.5%. The same for earnings indicates an increase of 16.5%.
Image Source: Zacks Investment Research
The company’s ROE of 9.4% compares favorably with the industry’s 8.8%.
The Pennant Group: It is the parent company of the Pennant group of affiliated home health, hospice and senior living companies. This month, The Pennant Group announced that effective Sept. 1, 2025, it has acquired a premier home health agency and outpatient therapy operation in Wyoming. In August, the company reported its second-quarter 2025 results, where it witnessed solid improvement in its overall top line. Its Home Health and Hospice Services and Senior Living Services segments recorded a robust uptick in revenues. The company also recorded strength in its total home health admissions and total Medicare home health admissions. The uptick in total hospice admissions and the Hospice average daily census in the second quarter was also impressive. PNTG carries a Zacks Rank of 3.
For this Eagle, ID-based company, the Zacks Consensus Estimate for 2025 revenues suggests growth of 26.5%. The same for earnings indicates an increase of 21.3%.
Image Source: Zacks Investment Research
The company’s ROE of 9.9% compares favorably with the industry’s 8.8%.