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Select Medical (SEM) Outpaces Stock Market Gains: What You Should Know

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Select Medical (SEM - Free Report) closed the most recent trading day at $39.94, moving +0.99% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.88%.

Coming into today, shares of the hospital and rehabilitation center operator had gained 1.88% in the past month. In that same time, the Medical sector lost 1.22%, while the S&P 500 gained 0.15%.

Wall Street will be looking for positivity from SEM as it approaches its next earnings report date. On that day, SEM is projected to report earnings of $0.60 per share, which would represent year-over-year growth of 57.89%. Our most recent consensus estimate is calling for quarterly revenue of $1.51 billion, up 22.67% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.56 per share and revenue of $6.11 billion, which would represent changes of +35.45% and +10.37%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for SEM. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 15.06% higher. SEM currently has a Zacks Rank of #2 (Buy).

In terms of valuation, SEM is currently trading at a Forward P/E ratio of 15.45. This represents a discount compared to its industry's average Forward P/E of 18.81.

It is also worth noting that SEM currently has a PEG ratio of 1.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Medical - HMOs was holding an average PEG ratio of 1.22 at yesterday's closing price.

The Medical - HMOs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 49, which puts it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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