Mechanicsburg, Pa. – Select Medical (NYSE:) Holdings Corporation (NYSE: SEM) today disclosed financial results for the first quarter ended March 31, 2024, reporting significant increases in revenue and net income and providing guidance on 2024 results Optimistic adjustments to the business outlook were made.
The healthcare provider reported first-quarter revenue growth of 7.4% to $1.79 billion, up from $1.67 billion in the same period last year. Net profit for the quarter soared 37.4% to $117.2 million, compared with $85.3 million in the first quarter last year. The company’s operating income also increased significantly by 28.1%, reaching $194 million.
Earnings per common share rose 33.9% to $0.75, and adjusted earnings per common share rose 37.5% to $0.77. Adjusted EBITDA, a key profitability metric for the company, grew 22.4% to $261.9 million.
Select Medical operates across multiple healthcare segments, including critical illness rehabilitation hospitals, rehabilitation hospitals, outpatient rehabilitation clinics and occupational health centers. Revenue from the critical care hospital segment increased by 10.4%, and revenue from the rehabilitation hospital segment increased by 14.8%. However, the outpatient rehabilitation segment’s adjusted EBITDA margin declined, from 10.2% to 8.2%.
The company’s board of directors declared a cash dividend of $0.125 per share, payable on May 30, 2024 to shareholders of record as of May 16, 2024. Adjusted EBITDA and fully diluted earnings per share are expected to be higher.
Select Medical emphasized that future dividends will be determined at the discretion of the board of directors after considering various financial factors. The company’s stock repurchase program, which authorizes the repurchase of up to $1 billion of common stock, will remain in effect until December 31, 2025.
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No shares were repurchased in the first quarter of 2024, but since the program began, the company has repurchased 48.2 million shares at an average cost of $12.45 per share.
Investment Professional Insights
Select Medical Holdings Corporation (NYSE: SEM) had a strong first quarter of 2024, with revenue and net income growing significantly. To provide investors with deeper insights, InvestingPro highlights some key metrics and techniques that can be valuable when evaluating a company’s financial health and stock performance.
InvestingPro Data shows that Select Medical has a market capitalization of $3.65 billion, reflecting its size and influence in the medical services industry. The company’s price-to-earnings ratio, a measure of its current share price relative to its earnings per share, is 14.81, suggesting the stock is likely fairly valued in the context of its earnings. Additionally, the PEG ratio for the trailing twelve months to Q4 2023 was 0.28, indicating that the company is likely undervalued when considering its earnings growth rate.
In InvestingPro Tips, it’s worth noting that Select Medical’s price-to-earnings ratio is low relative to recent earnings growth, which may represent an attractive investment opportunity for those focused on earnings potential. Furthermore, the company has been profitable over the last twelve months, which is a reassuring sign of its financial stability. It’s also worth noting that Select Medical has delivered strong returns over the past five years, underscoring its long-term growth potential.
For investors looking for more analysis and information, InvestingPro has additional tips for Select Medical, including insights into shareholder returns and stock volatility.Use coupon code PRONEWS24, investors who subscribe to Pro and Pro+ annually or every two years can receive an additional 10% discount. Visit https://www.investing.com/pro/SEM to explore the full suite of InvestingPro tips, where you’ll find a total of 8 additional tips to help guide your investment decisions.
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