Select Medical Holdings Corporation SEM recently inked an agreement to acquire Valir Rehabilitation Hospital from Valir Health. The hospital is a 50-bed inpatient rehabilitation facility located in Oklahoma City. The financial details of the deal were kept under wraps.
This move bodes well for Select Medical as it will expand its footprint in Oklahoma City. The buyout seems to be a time-opportune move on the part of Select Medical as this region is witnessing a growing demand for inpatient rehabilitative care.
SEM is currently present in Oklahoma City in the outpatient care market and post-ICU. However, with this acquisition, the company is foraying into inpatient care. SEM currently operates Select Specialty Hospital, a critical illness recovery hospital in the region, along with 29 Select Physical Therapy outpatient centers.
SEM’s hospital divisions have been contributing to its growth trajectory, especially its inpatient rehabilitation division. This unit generated double-digit revenue growth and adjusted EBITDA in the second quarter of 2024. This acquisition also reflects SEM’s efforts to grow its existing networks and improve its financial results as a by-product. SEM has been quite active in pursuing opportunistic acquisitions and identifying JVs. The company has many upcoming projects in the inpatient rehabilitation space and it expects this business to continue with its strong performance in 2024.
Expansion initiatives, similar to the latest one, are likely to boost SEM’s revenues from its rehabilitation hospitals, whose count was 33 as of June 30, 2024. The Rehabilitation Hospital segment accounted for nearly 15.2% of Select Medical’s overall top line in the second quarter.
SEM’s Zacks Rank and Price Performance
SEM currently carries a Zacks Rank #4 (Sell).
Shares of Select Medical have gained 28.4% in the past year compared with the industry’s 22.3% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the Medical space are HCA Healthcare, Inc. HCA, LeMaitre Vascular, Inc. LMAT, and The Ensign Group, Inc. ENSG. While HCA Healthcare and LeMaitre Vascular currently sport a Zacks Rank #1 (Strong Buy), The Ensign Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
HCA Healthcare’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the mark once, the average surprise being 8.24%. The consensus estimate for HCA’s 2024 earnings indicates a rise of 18.4% from the year-ago number. The consensus mark for revenues indicates growth of 8.9% from the year-ago figure. The Zacks Consensus Estimate for HCA’s earnings has moved 1.7% north in the past 30 days.
LeMaitre Vascular’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.87%. The consensus estimate for LMAT’s 2024 earnings indicates an improvement of 37% from the year-ago figure. The consensus mark for revenues implies growth of 13% from the year-ago figure. The Zacks Consensus Estimate for LMAT’s earnings has moved 4.5% north in the past 30 days.
The Ensign Group’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 1.40%. The consensus estimate for ENSG’s 2024 earnings indicates a rise of 14.1% from the year-ago number. The consensus mark for revenues implies an improvement of 13.1% from the year-ago figure. The Zacks Consensus Estimate for ENSG’s earnings has moved 0.4% north in the past 30 days.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpHCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
Select Medical Holdings Corporation (SEM) : Free Stock Analysis Report
LeMaitre Vascular, Inc. (LMAT) : Free Stock Analysis Report
The Ensign Group, Inc. (ENSG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
