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Select Medical (SEM) Up 21.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Select Medical (SEM - Free Report) . Shares have added about 21.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Select Medical due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Select Medical delivered second-quarter earnings of 38 cents per share. The Zacks Consensus Estimate was of a loss of 6 cents. Moreover, the bottom line improved 15.2% year over year on the back of lower costs and expenses.
Meanwhile, net operating revenues decreased 9.3% year over year to $1.23 billion due to COVID-19 pandemic and a weak performance by the Outpatient Rehabilitation and Concentra segments. However, the top line beat the Zacks Consensus Estimate by 1.1%.
Total cost and expenses fell 5.5% to $1.1 billion owing to lower cost of services, and general and administrative costs.
Adjusted EBITDA dropped 4% year over year to $178.8 million.
Critical Illness Recovery Hospital
Operating revenues increased 12.7% to $519.6 million on the back of better patient days.
Adjusted EBITDA for the segment jumped 39.9% to $89.7 million.
Rehabilitation Hospital Segment
Operating revenues were up 5.2% to $168.7 million, led by expanded patient volumes and revenue per patient day. Adjusted EBITDA dropped 8% to $27.6 million.
Outpatient Rehabilitation
Operating revenues plunged 36.2% to $167.1 in the second quarter due to lower visits.
Adjusted EBITDA losses of $6.3 million came against the year-ago quarter’s Adjusted EBITDA of $42.6 million.
Concentra
Operating revenues were down 24.5% year over year to $312.3 million due to a dip in the number of visits.
Adjusted EBITDA declined 45.5% to $41.5 million.
Balance Sheet Position
At the end of the second quarter, the company had $3.3 billion of long-term debt, net of current portion, down 0.9% from the level at 2019 end.
Total equity of $1172 million increased 26.2% from the level on Dec 31, 2019.
Total cash and cash equivalents of $509 million were up 51.8% from the level as of Dec 31, 2019.
Cash flow provided by operating activities as of Jun 30, 2020 was $642 million, increasing sevenfold year over year.
Share Repurchase Update
Select Medical did not buy back shares in the second quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 58.33% due to these changes.
VGM Scores
At this time, Select Medical has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Select Medical has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Select Medical (SEM) Up 21.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Select Medical (SEM - Free Report) . Shares have added about 21.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Select Medical due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Select Medical's Q2 Earnings Beat Estimates, Rise Y/Y
Select Medical delivered second-quarter earnings of 38 cents per share. The Zacks Consensus Estimate was of a loss of 6 cents. Moreover, the bottom line improved 15.2% year over year on the back of lower costs and expenses.
Meanwhile, net operating revenues decreased 9.3% year over year to $1.23 billion due to COVID-19 pandemic and a weak performance by the Outpatient Rehabilitation and Concentra segments. However, the top line beat the Zacks Consensus Estimate by 1.1%.
Total cost and expenses fell 5.5% to $1.1 billion owing to lower cost of services, and general and administrative costs.
Adjusted EBITDA dropped 4% year over year to $178.8 million.
Critical Illness Recovery Hospital
Operating revenues increased 12.7% to $519.6 million on the back of better patient days.
Adjusted EBITDA for the segment jumped 39.9% to $89.7 million.
Rehabilitation Hospital Segment
Operating revenues were up 5.2% to $168.7 million, led by expanded patient volumes and revenue per patient day. Adjusted EBITDA dropped 8% to $27.6 million.
Outpatient Rehabilitation
Operating revenues plunged 36.2% to $167.1 in the second quarter due to lower visits.
Adjusted EBITDA losses of $6.3 million came against the year-ago quarter’s Adjusted EBITDA of $42.6 million.
Concentra
Operating revenues were down 24.5% year over year to $312.3 million due to a dip in the number of visits.
Adjusted EBITDA declined 45.5% to $41.5 million.
Balance Sheet Position
At the end of the second quarter, the company had $3.3 billion of long-term debt, net of current portion, down 0.9% from the level at 2019 end.
Total equity of $1172 million increased 26.2% from the level on Dec 31, 2019.
Total cash and cash equivalents of $509 million were up 51.8% from the level as of Dec 31, 2019.
Cash flow provided by operating activities as of Jun 30, 2020 was $642 million, increasing sevenfold year over year.
Share Repurchase Update
Select Medical did not buy back shares in the second quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 58.33% due to these changes.
VGM Scores
At this time, Select Medical has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Select Medical has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.