One-glance verdict
Overvalued
$14.11 our estimate vs market $40.03
Wall Street consensus: $46.67 (230.8% higher than our fair-value estimate)
184% above our estimate, beyond the bull case
Fundamentals snapshot
The Pennant Group, Inc.
PNTG · NMS · Healthcare · Medical Care Facilities
Current price
$40.03
52-week range
$22.25 - $42.74
Market cap
$1.40B
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 21.7% above its 5-year average P/E.
What this company does
The Pennant Group, Inc.
The Pennant Group provides healthcare for seniors, making most of its money in two ways: offering in-home nursing and therapy, and running senior living communities. The company earns revenue (the money it makes from sales) by billing for this care and by charging residents for housing and meals, which is important as the need for senior care is expected to increase.
How the company got here
The Pennant Group was formed in 2019 when it was spun off from a larger healthcare company called The Ensign Group. This means that Ensign separated its home health, hospice, and senior living businesses to create Pennant as a new, independent company. The idea was to allow Pennant to focus specifically on these areas of care and grow on its own. The company's mission was inspired by a personal family experience with compassionate home health and hospice care, which forms the foundation of its approach to service. Since becoming its own publicly traded company, Pennant has grown by acquiring other local healthcare agencies.
What it actually does
The Pennant Group provides healthcare services primarily for seniors in their own homes or in senior living communities. Think of them as the support system that helps older adults live comfortably and get the medical attention they need without being in a hospital. Their services range from skilled nursing and therapy after a surgery to assistance with daily activities and end-of-life care. They operate numerous local agencies and communities across several states, mostly in the western U.S.
Home Health and Hospice Services
This is a major part of Pennant's business and involves sending healthcare professionals to a patient's home. Home health care includes services like nursing care and physical therapy for people recovering from an illness or surgery. Hospice care provides comfort and support for individuals with terminal illnesses and their families. The company gets paid for these services primarily by government programs like Medicare, as well as by private insurance.
Senior Living Services
This segment operates communities where seniors can live and receive varying levels of support. These are not hospitals, but rather residential communities that offer housing, meals, social activities, and help with daily tasks like bathing and dressing. Some communities also offer specialized memory care for residents with dementia or Alzheimer's. Residents or their families typically pay for these services directly, which is known as private-pay.
What management is betting on now
The company's main strategy is to empower local leaders to run their individual agencies and communities, believing that healthcare is best delivered at a local level. They are focused on growing their existing operations by becoming the preferred provider in the communities they serve. Pennant also plans to continue acquiring smaller home health, hospice, and senior living businesses in a disciplined way. Recently, a key priority has been to successfully integrate the operations of several large acquisitions to improve their performance and profitability.
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 $14.11 vs current price $40.03
Wall Street consensus is the average analyst price target: $46.67 (230.8% higher than our fair-value estimate).
Our most-likely fair value is $14.11 a share — about 64.8% below today's price of $40.03, 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 21.7% 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)
46.55x
Forward P/E
25.22x
P/B
3.91x
P/S
1.27x
EV/EBITDA
25.80x
PEG ratio
2.09x
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
0.86
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
—
Payout ratio
0.0%
Last ex-div date
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