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Select Medical
(NYSE:SEM)
Select Model
Select Model
Rating:56Neutral
Price Target:
$17.00
▲(3.72% Upside)
Action:Reiterated
Date:07/02/26
SEM scores in the mid-range primarily due to mixed financial performance: improved leverage and stable revenue are offset by materially lower margins and weaker/volatile free cash flow conversion. Technical indicators are neutral-to-soft, valuation is reasonable, and the latest earnings commentary and go-private outcome provide support but are tempered by leverage and segment margin pressures.
Positive Factors
Improved Balance Sheet / Lower Leverage
Select Medical’s materially improved leverage and larger equity base provide lasting financial flexibility. A lower debt-to-equity ratio and bigger capital cushion reduce default and covenant risk, support continued development spending, and make the company more resilient to reimbursement or volume shocks over the next several months.
Negative Factors
Compressed Profitability / Lower Margins
Material margin compression versus prior years signals weaker pricing power and/or higher costs that reduce durable earnings power. Lower gross and net margins limit retained earnings for reinvestment, amplify the earnings impact of any reimbursement setbacks, and make the business more sensitive to operational volatility over months.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved Balance Sheet / Lower Leverage
Select Medical’s materially improved leverage and larger equity base provide lasting financial flexibility. A lower debt-to-equity ratio and bigger capital cushion reduce default and covenant risk, support continued development spending, and make the company more resilient to reimbursement or volume shocks over the next several months.
Read all positive factors
Select Medical (SEM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.05B
Dividend Yield1.69%
Average Volume (3M)1.19M
Price to Earnings (P/E)15.1
Beta (1Y)0.67
Revenue Growth-10.76%
EPS Growth-20.86%
CountryUS
Employees30,000
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)1.09
Shares Outstanding123,942,955
10 Day Avg. Volume1,406,764
30 Day Avg. Volume1,192,837
Financial Highlights & Ratios
PEG Ratio-0.44
Price to Book (P/B)1.08
Price to Sales (P/S)0.34
P/FCF Ratio4.79
Enterprise Value/Market Cap2.45
Enterprise Value/Revenue0.91
Enterprise Value/Gross Profit8.53
Enterprise Value/Ebitda9.68
Forecast
1Y Price Target
$16.50Price Target Upside0.67% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)1.3
Revenue Forecast (FY)$5.70B
Select Medical Business Overview & Revenue Model
Company Description
Select Medical Holdings Corporation (SEM) is a U.S.-based healthcare organization that manages a diverse portfolio of specialized medical facilities. The company operates across four primary divisions: critical illness recovery hospitals, rehabili...
How the Company Makes Money
Select Medical makes money primarily by delivering healthcare services and billing payors for patient care and employer-sponsored health services. Its key revenue streams include: (1) Specialty hospitals (Select Medical segment): revenue is genera...
Select Medical Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: revenue growth (total +5%) and strong inpatient rehabilitation performance (revenue +14%, adjusted EBITDA +15%) and an active development pipeline were clear positives, along with supportive proposed CMS payment updates and maintained full-year guidance. Offsetting these were a meaningful decline in consolidated adjusted EBITDA (-6.5%), lower EPS (0.35 vs 0.44), a 15% EBITDA decline in the critical illness segment driven by Medicare Advantage conversion/denials (~$13M–$14M impact), outpatient margin pressure, and elevated leverage that will increase with the contemplated $1.0B term loan upon the take-private. Overall, positives and negatives are balanced.Positive Updates
Take-Private Transaction Announced
Agreement to be acquired for $16.50 per share; unanimously approved by the Board; expected close mid-2026 (subject to approvals). Hart-Scott-Rodino waiting period expired Apr 27, 2026. Upon closing, company will become privately held and senior secured credit facilities will provide an additional $1.0B term loan at interest = SOFR + 3%.
Negative Updates
Overall Adjusted EBITDA and EPS Decline
Adjusted EBITDA declined 6.5% y/y to $141.0M (from $151.4M). Earnings per common share declined to $0.35 from $0.44 year-over-year (adjusted EPS $0.36 after take-private costs).
Read all updates
Q1-2026 Updates
Positive
Negative
Take-Private Transaction Announced
Agreement to be acquired for $16.50 per share; unanimously approved by the Board; expected close mid-2026 (subject to approvals). Hart-Scott-Rodino waiting period expired Apr 27, 2026. Upon closing, company will become privately held and senior secured credit facilities will provide an additional $1.0B term loan at interest = SOFR + 3%.
Read all positive updates
Company Guidance
Select Medical reiterated full‑year 2026 guidance of revenue $5.6–$5.8 billion, adjusted EBITDA $520–$540 million, fully diluted EPS $1.22–$1.32, and capital expenditures of $200–$220 million; the Board also approved a $0.0625 per share cash dividend payable May 28 to shareholders of record May 14. Management noted potential regulatory tailwinds if CMS finalizes proposed FY2027 rules that would raise the inpatient rehab (IRF) federal payment rate by ~2.6% and the LTACH rate by ~2.66% (high‑cost outlier threshold remaining at $78,936). Key balance‑sheet and near‑term operating metrics cited include $1.9 billion of total debt, $25.7 million of cash, net leverage of 3.75x, $443.5 million of revolver availability, DSO of 60 days, and development growth with 166 beds opened year‑to‑date and 275 additional beds expected (209 IRF, 66 critical illness) across 2026–2027, including planned 60‑bed and 76‑bed hospital openings.Select Medical Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
68
Positive
Cash Flow
46
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.52B | 5.45B | 5.19B | 6.66B | 6.33B | 6.20B |
| Gross Profit | 588.00M | 629.29M | 633.64M | 932.04M | 733.38M | 919.37M |
| EBITDA | 518.25M | 530.63M | 507.27M | 789.74M | 635.51M | 968.35M |
| Net Income | 133.53M | 146.22M | 214.04M | 243.49M | 158.99M | 402.23M |
Balance Sheet | ||||||
| Total Assets | 6.04B | 5.85B | 5.61B | 7.69B | 7.67B | 7.36B |
| Cash, Cash Equivalents and Short-Term Investments | 25.68M | 26.52M | 59.69M | 111.59M | 172.76M | 74.31M |
| Total Debt | 2.99B | 3.70B | 2.70B | 4.52B | 5.16B | 4.76B |
| Total Liabilities | 3.94B | 3.82B | 3.61B | 6.12B | 6.27B | 6.00B |
| Stockholders Equity | 1.76B | 1.71B | 1.68B | 1.29B | 1.12B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 117.24M | 382.74M | 539.65M | 352.86M | 94.45M | 220.69M |
| Operating Cash Flow | 346.47M | 346.47M | 517.86M | 582.06M | 284.82M | 401.23M |
| Investing Cash Flow | -213.55M | -216.49M | -231.01M | -268.48M | -226.34M | -256.59M |
| Financing Cash Flow | -166.09M | -163.15M | -311.17M | -327.48M | -34.89M | -647.38M |
Select Medical Technical Analysis
Neutral
16.39
Price Trends
16.48
Positive
16.23
Positive
15.12
Positive
Market Momentum
0.01
Positive
46.81
Neutral
8.66
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEM, the sentiment is Neutral. The current price of 16.39 is below the 20-day moving average (MA) of 16.56, below the 50-day MA of 16.48, and above the 200-day MA of 15.12, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 46.81 is Neutral, neither overbought nor oversold. The STOCH value of 8.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SEM.
Select Medical Risk Analysis
Select Medical disclosed 44 risk factors in its most recent earnings report. Select Medical reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Select Medical Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $3.41B | 27.37 | 11.68% | 1.80% | 11.40% | 13.96% | |
72 Outperform | $2.20B | 12.99 | 20.09% | ― | -2.25% | ― | |
70 Outperform | $2.44B | 79.61 | 3.88% | ― | 56.69% | -15.92% | |
69 Neutral | $1.98B | 7.18 | 241.47% | ― | 20.49% | 4335.46% | |
56 Neutral | $2.05B | 15.15 | 7.83% | 1.69% | -10.76% | -20.86% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
47 Neutral | $3.79B | -18.48 | 9999.00% | ― | -0.36% | 16.69% |
* Healthcare Sector Average
SEM
Select Medical
16.51
1.95
13.40%
BKD
Brookdale Senior Living
15.87
9.18
137.22%
MD
Pediatrix Medical Group
26.76
13.31
98.96%
NHC
National Healthcare
218.44
115.98
113.18%
ASTH
Astrana Health
49.17
25.02
103.60%
AVAH
Aveanna Healthcare Holdings
9.10
4.80
111.63%
Select Medical Corporate Events
Delistings and Listing ChangesM&A TransactionsPrivate Placements and FinancingShareholder Meetings
Select Medical acquired by Ortenzio-led investor consortium
Positive
Jul 1, 2026
Select Medical Holdings, a major U.S. post-acute care operator, has been acquired by an entity affiliated with a consortium led by Executive Chairman and co-founder Robert A. Ortenzio, senior finance executive Martin F. Jackson and private equity ...
Delistings and Listing ChangesM&A TransactionsShareholder Meetings
Select Medical Shareholders Approve Going-Private Acquisition Deal
Positive
Jun 26, 2026
Select Medical confirmed that stockholders approved its acquisition by a consortium led by Executive Chairman and co-founder Robert A. Ortenzio, senior executive Martin F. Jackson and private equity firm Welsh, Carson, Anderson Stowe at a special...
Legal ProceedingsM&A TransactionsRegulatory Filings and ComplianceShareholder Meetings
Select Medical issues disclosures amid go-private scrutiny
Negative
Jun 22, 2026
On May 19, 2026, Select Medical filed a definitive proxy statement ahead of a June 26, 2026 special meeting where shareholders will vote on its previously announced acquisition by a consortium led by Executive Chairman and Co-Founder Robert A. Ort...
Business Operations and StrategyExecutive/Board ChangesDelistings and Listing ChangesDividendsFinancial DisclosuresM&A Transactions
Select Medical Declares Dividend Amid Mixed Quarterly Results
Positive
Apr 30, 2026
On April 28, 2026, Select Medical’s board-level compensation committee deferred by one year the vesting of several equity award tranches previously granted to Executive Chairman and Co-Founder Robert A. Ortenzio and Senior Executive Vice Pre...
Executive/Board ChangesShareholder Meetings
Select Medical Shareholders Back Governance Changes at Annual Meeting
Positive
Apr 24, 2026
At its annual meeting of stockholders held on April 23, 2026, Select Medical shareholders re-elected three Class II directors, including executive leaders, and gave strong support in a non-binding vote to the compensation of the company’s na...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.