MECHANICSBURG, Pa. – Select Medical (NYSE:SEM) Holdings Corporation (NYSE: SEM) today disclosed its financial results for the first quarter ended March 31, 2024, revealing a significant increase in revenue and net income, alongside an optimistic adjustment to its 2024 business outlook.
The healthcare services provider reported a 7.4% increase in first-quarter revenue to $1.79 billion, up from $1.67 billion in the same quarter of the previous year. Net income for the quarter surged by 37.4% to $117.2 million, compared to $85.3 million in the prior year's first quarter. The company's income from operations also saw a notable rise of 28.1% to $194.0 million.
Earnings per common share jumped 33.9% to $0.75, while adjusted earnings per common share climbed 37.5% to $0.77. The company's Adjusted EBITDA, a key earnings metric, increased by 22.4% to $261.9 million.
Select Medical operates across several healthcare segments, including critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers. The critical illness recovery hospital segment experienced a 10.4% revenue increase, while the rehabilitation hospital segment's revenue rose by 14.8%. However, the outpatient rehabilitation segment saw a decrease in Adjusted EBITDA margin, dropping from 10.2% to 8.2%.
The company's board declared a cash dividend of $0.125 per share, payable on May 30, 2024, to stockholders of record as of May 16, 2024. Additionally, Select Medical reaffirmed its 2024 revenue outlook and adjusted its expectations for Adjusted EBITDA and fully diluted earnings per share, projecting higher figures.
Select Medical emphasized that future dividends are subject to the board's discretion, considering various financial factors. The company's stock repurchase program, authorizing up to $1.0 billion in common stock buybacks, remains active until December 31, 2025.
No shares were repurchased in the first quarter of 2024, but since the program's inception, the company has repurchased 48.2 million shares at an average cost of $12.45 per share.
InvestingPro Insights
Select Medical Holdings Corporation (NYSE: SEM) has shown a robust performance in the first quarter of 2024, with substantial gains in revenue and net income. To provide investors with deeper insight, InvestingPro has highlighted some key metrics and tips that could be valuable when evaluating the company's financial health and stock performance.
InvestingPro Data indicates that Select Medical has a market capitalization of $3.65 billion USD, reflecting its size and influence within the healthcare services sector. The company’s P/E ratio, a measure of its current share price relative to its per-share earnings, stands at 14.81, suggesting that the stock may be reasonably valued in the context of its earnings. Additionally, a PEG ratio of 0.28 for the last twelve months as of Q4 2023 indicates potential undervaluation when considering the company's earnings growth rate.
Among the InvestingPro Tips, it’s noteworthy that Select Medical is trading at a low P/E ratio relative to near-term earnings growth, which could signal an attractive investment opportunity for those looking at earnings potential. Moreover, the company has been profitable over the last twelve months, which is a reassuring sign of its financial stability. It is also important to note that Select Medical has had a strong return over the last five years, emphasizing its long-term growth potential.
For investors seeking additional analysis and information, InvestingPro offers more tips for Select Medical, including insights into shareholder yield and stock volatility. With the use of coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Visit https://www.investing.com/pro/SEM to explore the full range of InvestingPro Tips, where you will find a total of 8 additional tips to help guide your investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.