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What's in Store for Select Medical's (SEM) Q4 Earnings?

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Select Medical Holdings Corporation (SEM - Free Report) is slated to report fourth-quarter 2019 results on Feb 20.

The Zacks Consensus Estimate for the company’s earnings per share is pegged at 20 cents, which remains unchanged from the year-ago quarter’s reported figure. The consensus mark for revenues is pegged at $1.34 billion, suggesting an increase of 5.73% from the year-ago quarter’s reported figure.

Let’s see how things have shaped up for this announcement.

Revenues across the segments, Critical illness Recovery Hospital and Rehabilitation Hospital, are likely to have seen an upside due to increase in the number of hospitals, patients, admissions and revenue per patient day.
Revenues at Outpatient Rehabilitation are likely to have benefited from an increase in the number of clinics and number of visits.

Concentra revenues are likely to have seen an upside from increase in the number of visits partly offset by lower number of centers and a decline in revenue per visit.

Total operating costs are likely to have increased due to higher cost of services, general and administrative costs and depreciation and amortization costs.

Also, shares bought back during the to-be-reported quarter are likely to have aided the bottom line.

Company’s Guidance

The company expects consolidated net operating revenues for 2019 to be $5.375-$5.475 billion, adjusted EBITDA between $685 million and $700 million, diluted earnings per share in the range of $1.00-$1.06, and adjusted earnings per common share between $1.07 and $1.13.

Earnings Surprise History

The company does not have an attractive earnings surprise history. It surpassed estimates in just one of the trailing four quarters, missed in one and matched in the remaining two quarters, with the surprise being 11.07%, on average. This is depicted in the chart below:

Select Medical Holdings Corporation Price and EPS Surprise

What Our Quantitative Model Predicts

Our proven model does not predict an earnings beat for Select Medical this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Select Medical has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 20 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Select Medical carries a Zacks Rank #2.

Stocks to Consider

Some stocks with the apt combination of elements to surpass estimates this reporting cycle are as follows:

Community Health Systems, Inc. (CYH - Free Report) with an Earnings ESP of +5.41% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMAG Pharmaceuticals, Inc. with an Earnings ESP of +31.03% and a Zacks Rank of 3.

Aduro Biotech, Inc. with an Earnings ESP of +23.08% and a Zacks Rank of 3.

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