Wrapping up Q1 earnings, we look at the numbers and key takeaways for the senior health, home health & hospice stocks, including Option Care Health (NASDAQ:OPCH) and its peers.
The senior health, home care, and hospice care industries provide essential services to aging populations and patients with chronic or terminal conditions. These companies benefit from stable, recurring revenue driven by relationships with patients and families that can extend many months or even years. However, the labor-intensive nature of the business makes it vulnerable to rising labor costs and staffing shortages, while profitability is constrained by reimbursement rates from Medicare, Medicaid, and private insurers. Looking ahead, the industry is positioned for tailwinds from an aging population, increasing chronic disease prevalence, and a growing preference for personalized in-home care. Advancements in remote monitoring and telehealth are expected to enhance efficiency and care delivery. However, headwinds such as labor shortages, wage inflation, and regulatory uncertainty around reimbursement could pose challenges. Investments in digitization and technology-driven care will be critical for long-term success.
The 7 senior health, home health & hospice stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.3%.
Thankfully, share prices of the companies have been resilient as they are up 5.1% on average since the latest earnings results.
Option Care Health (NASDAQ:OPCH)
With a nationwide network of 177 locations serving 43 states and a team of over 4,500 clinicians, Option Care Health (NASDAQ:OPCH) is the largest independent provider of home and alternate site infusion services, delivering medications and clinical support to patients across the United States.
Option Care Health reported revenues of $1.33 billion, up 16.3% year on year. This print exceeded analysts’ expectations by 6.1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
Option Care Health achieved the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 5.3% since reporting and currently trades at $31.22.
Is now the time to buy Option Care Health? Access our full analysis of the earnings results here, it’s free.
Best Q1: BrightSpring Health Services (NASDAQ:BTSG)
Founded in 1974, BrightSpring Health Services (NASDAQ:BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.
BrightSpring Health Services reported revenues of $2.88 billion, up 11.7% year on year, outperforming analysts’ expectations by 4.6%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
BrightSpring Health Services scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 31.4% since reporting. It currently trades at $23.50.
Is now the time to buy BrightSpring Health Services? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Brookdale (NYSE:BKD)
With a network of over 650 communities serving approximately 59,000 residents across 41 states, Brookdale Senior Living (NYSE:BKD) operates senior living communities across the United States, offering independent living, assisted living, memory care, and continuing care retirement communities.
Brookdale reported revenues of $813.9 million, up 4% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 2.5% since the results and currently trades at $6.62.
Read our full analysis of Brookdale’s results here.
AdaptHealth (NASDAQ:AHCO)
With a network of approximately 680 locations serving patients across all 50 states, AdaptHealth (NASDAQ:AHCO) provides home medical equipment, supplies, and related services to patients with chronic conditions like sleep apnea, diabetes, and respiratory disorders.
AdaptHealth reported revenues of $777.9 million, down 1.8% year on year. This print topped analysts’ expectations by 1.7%. Taking a step back, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates and full-year revenue guidance slightly missing analysts’ expectations.
AdaptHealth had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is up 1.7% since reporting and currently trades at $8.85.
Read our full, actionable report on AdaptHealth here, it’s free.
The Pennant Group (NASDAQ:PNTG)
Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group (NASDAQ:PNTG) operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.
The Pennant Group reported revenues of $209.8 million, up 33.7% year on year. This result surpassed analysts’ expectations by 4.1%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ EPS estimates and a narrow beat of analysts’ sales volume estimates.
The Pennant Group pulled off the fastest revenue growth among its peers. The stock is up 7.4% since reporting and currently trades at $28.88.
Read our full, actionable report on The Pennant Group here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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