- Revenue Growth: FY2025 revenue reached $3.31B (+5% YoY), with 2026 guidance at $3.37B–$3.45B.
- Adjusted EBITDA: FY2025 adjusted EBITDA was $608.9M; 2026 guidance set at $575M–$610M.
- Bed Expansion: Added 2,500 beds in 3 years; plans to add 400–600 beds in 2026.
- Operational Shift: Transitioning from expansion to operational excellence, with same-facility volume growth of 0%–1% in 2026.
- Quality Initiatives: Expanding real-time quality dashboards (tracking 50+ metrics) and outcomes data in 2026.
Operational Challenges and Opportunities
The company's operational priorities are focused on execution and quality patient care. According to Debra Osteen, "We're expanding outcomes tracking across more programs in 2026, so we can be more transparent about patient progress over time." The company has added over 2,500 beds in the past three years and is on track to add another 400 to 600 beds in 2026. The ramping facilities opened between 2023 and 2025 are now at higher occupancy levels, driving greater leverage in EBITDA, as noted by Todd Young.
Valuation and Growth Prospects
Analysts estimate the company's revenue growth at 5.4% for the next year. The current valuation metrics show a P/E Ratio of -1.71, P/B Ratio of 0.97, and P/S Ratio of 0.57. The EV/EBITDA ratio is -5.96, indicating a potentially undervalued stock. However, the ROE is -39.42%, and the Net Debt / EBITDA is -3.4, suggesting some concerns regarding the company's financial health.
Key Drivers and Risks
The company's performance is expected to be influenced by factors such as managed Medicaid pressure on average length of stay, bed closures, and changes in California's staffing requirements. Todd Young mentioned that the company expects a $4 million EBITDA impact due to a higher nurse-to-patient ratio in California. The referral channel mix has remained relatively stable, with a focus on building relationships and connecting with referral sources.