MECHANICSBURG, Pa. - Select Medical (NYSE:SEM) Holdings Corporation (NYSE: SEM) disclosed its financial results for the third quarter ended September 30, 2024, noting a revenue increase of 5.7% to $1.76 billion compared to the same period the previous year. The healthcare services provider also reported an 8.6% rise in income from operations to $141.1 million and a significant 33.2% surge in net income to $81.0 million.
The company, which operates a variety of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers, saw an increase in adjusted EBITDA by 6.0% to $205.5 million. Earnings per common share rose by 13.2% to $0.43, and adjusted earnings per common share grew by 8.7% to $0.50.
For the nine months ending on the same date, Select Medical's revenue increased by 6.1% to $5.31 billion, with income from operations climbing by 11.9% to $492.9 million. Net income for this period showed a 23.1% increase to $292.9 million.
The company's critical illness recovery hospital segment saw a 3.4% revenue increase in the third quarter, while the rehabilitation hospital segment experienced a more substantial revenue growth of 14.4%. The outpatient rehabilitation segment and the Concentra segment also reported revenue growths of 6.9% and 3.3%, respectively.
Select Medical's Board of Directors declared a cash dividend of $0.125 per share, payable on or about November 26, 2024, to stockholders of record as of November 13, 2024. However, there is no guarantee that future dividends will be declared, as they are subject to the Board's discretion based on various factors, including the company's financial condition and operating results.
The company's stock repurchase program, authorized to repurchase up to $1.0 billion worth of its common stock, did not see any repurchases in the nine months ending September 30, 2024. Since the inception of the program, Select Medical has repurchased 48.2 million shares at an average cost of approximately $12.45 per share.
Select Medical's business outlook for 2024 has been updated, with revenue expected to be between $6.95 billion and $7.15 billion, and adjusted EBITDA anticipated to range from $865.0 million to $885.0 million.
This financial report is based on a press release statement from Select Medical Holdings Corporation.
In other recent news, Select Medical Holdings Corporation reported robust performance and significant operational expansions in its second quarter 2024 financial results. The company completed the initial public offering of Concentra, retaining a majority stake of 82.23%, and plans to distribute the remaining interest to shareholders within a year. Deutsche Bank raised its stock price target on Select Medical's shares to $50.00, maintaining a Buy rating. This adjustment reflects the bank's expectation that Select Medical's stock will align more closely with its industry peers' valuation metrics, following the company's upcoming plans to distribute the remaining stake in Concentra to its shareholders. Similarly, BofA Securities updated its coverage on Select Medical Holdings stock, issuing a Buy rating and setting a price target of $42.00. The firm's analysis highlighted the market's undervaluation of Select Medical's remaining business following the anticipated spin-off of its Concentra unit. These recent developments reflect confidence in Select Medical's organic growth, driven by new openings and bed additions across its various healthcare facilities.
InvestingPro Insights
Select Medical Holdings Corporation's (NYSE: SEM) recent financial results align with several key metrics and insights from InvestingPro. The company's revenue growth of 5.7% in the third quarter is consistent with the InvestingPro data showing a revenue growth of 5.92% over the last twelve months. This steady growth trajectory is further supported by the company's robust financial performance across its various segments.
InvestingPro data reveals that Select Medical has a market capitalization of $4.2 billion and is trading at a P/E ratio of 15.58. This relatively modest valuation is particularly interesting when considered alongside one of the InvestingPro Tips, which notes that the company is "Trading at a low P/E ratio relative to near-term earnings growth." This suggests that the stock may be undervalued compared to its growth prospects.
Another relevant InvestingPro Tip indicates that Select Medical has been "Profitable over the last twelve months." This is corroborated by the company's reported increase in net income and earnings per share in the recent financial results. The company's profitability is further emphasized by its healthy EBITDA of $810.37 million over the last twelve months, with an impressive EBITDA growth of 18.06%.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights. Currently, there are 13 more InvestingPro Tips available for Select Medical Holdings, providing a deeper understanding of the company's financial health and market position.
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