One-glance verdict
Overvalued
$11.61 our estimate vs market $41.66
Wall Street consensus: $46.83 (303.6% higher than our fair-value estimate)
259% above our estimate, beyond the bull case
Fundamentals snapshot
The Pennant Group, Inc.
PNTG · NMS · Healthcare · Medical Care Facilities
Current price
$41.66
52-week range
$22.25 - $43.41
Market cap
$1.46B
Balance sheet
Stretched
7.62x Adequate
Net debt $480.28M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 16.3% last year.
- Reward Returns 10.4% on equity, ahead of 83% of its peers.
- Risk Net debt grew 34.4% over 3 years.
- Risk Stock trades 19.7% above its 5-year average P/E.
What this company does
The Pennant Group, Inc.
The Pennant Group offers healthcare services like home health and senior living in the US, with most of its money coming from providing care to patients in their homes or in senior living facilities. This matters because it shows how the company makes money by helping people who need ongoing medical and personal support.
How the company got here
The Pennant Group, Inc. was established in 2019 when it was spun off from The Ensign Group, Inc.. This separation created a dedicated company focused solely on home-based care and senior living services. Prior to becoming its own entity, Pennant's operations were part of a larger post-acute care portfolio. The company's history is rooted in a commitment to providing quality care, a mission that began with The Ensign Group's founding in 1999. Since its inception as an independent company, Pennant has focused on expanding its network through strategic acquisitions and by developing new locations, aiming to build density in local markets.
What it actually does
The Pennant Group provides a range of healthcare services primarily for seniors and individuals needing post-acute care. These services are delivered through a network of local agencies and communities across the United States. The company's core mission is to offer "life-changing service" by focusing on local leadership and community-based care. Pennant operates on a decentralized model, empowering local leaders to tailor services to the specific needs of their communities, which is seen as a key to its success.
Home Health and Hospice Services
This segment offers clinical services aimed at helping patients recover at home or providing end-of-life care. Home health services include skilled nursing, physical, occupational, and speech therapy, as well as medical social work and home health aide assistance, typically for patients recovering from illness, injury, or surgery. Hospice services provide comprehensive care, education, and counseling for terminally ill patients and their families, focusing on physical, spiritual, and psychosocial needs. These services are often reimbursed by government programs like Medicare and Medicaid, as well as commercial insurance plans. This segment represents a significant portion of Pennant's revenue.
Senior Living Services
This part of Pennant's business provides residential accommodations and support services for seniors who are independent or require some assistance with daily living. It includes offerings like assisted living, independent living, and memory care communities. Residents receive meals, housekeeping, and help with activities of daily living, fostering a sense of community and well-being. This segment is primarily funded through private pay from residents and their families.
What management is betting on now
Pennant's management is focused on optimizing the performance of its existing portfolio and driving operational excellence across its home health, hospice, and senior living businesses. A key strategic priority is to continue growing the senior living segment by improving occupancy rates and pricing. The company also remains open to selective acquisitions that fit its model of acquiring community-driven agencies and empowering local leaders. Management emphasizes developing strong local leadership, believing that empowered local teams are best positioned to understand and meet the unique needs of each community they serve.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$6.79M
FY2024 Q4
$17.25M
FY2025 Q1
$-23.19M
FY2025 Q2
$31.58M
FY2025 Q3
$10.47M
FY2025 Q4
$17.40M
FY2026 Q1
$-8.68M
FY2026 Q2
$15.49M
Revenue
$297.98M
Net income
$9.08M
Diluted EPS
0.25
Operating cash flow
$21.83M
Free cash flow
$15.49M
Fetching…
Sources
Revenue
$285.36M
Net income
$8.52M
Diluted EPS
0.24
Operating cash flow
$-3.40M
Free cash flow
$-8.68M
Fetching…
Sources
Revenue
$289.32M
Net income
$8.64M
Diluted EPS
0.25
Operating cash flow
$20.96M
Free cash flow
$17.40M
Fetching…
Sources
Revenue
$229.04M
Net income
$6.08M
Diluted EPS
0.17
Operating cash flow
$13.92M
Free cash flow
$10.47M
Fetching…
Sources
Revenue
$219.50M
Net income
$7.08M
Diluted EPS
0.20
Operating cash flow
$34.64M
Free cash flow
$31.58M
Fetching…
Sources
Revenue
$209.84M
Net income
$7.78M
Diluted EPS
0.22
Operating cash flow
$-21.23M
Free cash flow
$-23.19M
Fetching…
Sources
Revenue
$188.89M
Net income
$5.76M
Diluted EPS
0.16
Operating cash flow
$20.57M
Free cash flow
$17.25M
Fetching…
Sources
Revenue
$180.69M
Net income
$6.21M
Diluted EPS
0.20
Operating cash flow
$7.69M
Free cash flow
$6.79M
Fetching…
Sources
Is it cheap or expensive?
Fair value $11.61 vs current price $41.66
Wall Street consensus is the average analyst price target: $46.83 (303.6% higher than our fair-value estimate).
Our most-likely fair value is $11.61 a share — about 72.1% below today's price of $41.66, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $480.3M. Interest coverage 7.6x.
Net debt
$480.28M
Interest coverage
7.62x
The Pennant Group, Inc.'s profit covers its interest bill about 7.6 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
PNTG
BASELINE
The Pennant Group, Inc.
Total debt $495.55M Interest coverage 7.62x This is the baseline the peer rows are being compared against.
Total debt $86.95M Interest coverage 1.36x -82% vs PNTG Carries about 5.6x less debt cushion than PNTG.
Total debt $108.82M Interest coverage 10.18x +34% vs PNTG Carries about 1.3x more debt cushion than PNTG.
Total debt $1.57B Interest coverage -0.35x -100% vs PNTG This peer has almost no interest-payment cushion compared with PNTG.
Total debt $5.49B Interest coverage 0.36x -95% vs PNTG Carries about 21.0x less debt cushion than PNTG.
What you should know
The case for and against PNTG
3 Rewards
2 Risks
Rewards
-
Revenue grew 16.3% last year.
-
Returns 10.4% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Net debt grew 34.4% over 3 years.
-
Stock trades 19.7% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
45.78x
Forward P/E
26.25x
P/B
4.07x
P/S
1.32x
EV/EBITDA
26.56x
PEG ratio
2.05x
Profitability
How much profit each dollar creates
Gross margin
19.6%
Operating margin
6.2%
Net margin
2.9%
ROE
10.4%
ROA
4.5%
Health
Liquidity and balance-sheet strength
Debt / equity
1.23x
Current ratio
1.21x
Quick ratio
0.97x
Total debt
$495.55M
Total cash
$15.27M
Growth
How the business has been compounding
Revenue TTM
$1.10B
Revenue 5Y CAGR
21.2%
EPS TTM
0.91
EPS 5Y CAGR
56.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$53.30M
Free CF TTM
$36.26M
FCF margin
3.3%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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