U.S. Physical Therapy, Inc. (USPH) | Investment Case

1. Company Snapshot

1.a. Company Description

U.S. Physical Therapy, Inc., through its subsidiaries, operates outpatient physical therapy clinics that provide pre-and post-operative care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and neurological-related injuries.It operates through two segments, Physical Therapy Operations and Industrial Injury Prevention Services.The company offers industrial injury prevention services, including onsite injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments through physical therapists and specialized certified athletic trainers for Fortune 500 companies, and other clients comprising insurers and their contractors.

As of December 31, 2021, it operated 591 clinics in 39 states; and managed 35 physical therapy practice facilities.The company was founded in 1990 and is based in Houston, Texas.

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1.b. Last Insights on USPH

U.S. Physical Therapy, Inc.'s recent performance was positively driven by its Q2 2025 earnings beat, with quarterly earnings of $0.81 per share exceeding the Zacks Consensus Estimate of $0.71 per share. The company's strategic acquisition of a three-clinic physical therapy practice, generating $5.3 million in annual revenues, also contributed to growth. Additionally, Wall Street analysts expect a potential upside of 26.5% in the stock, citing a positive trend in earnings estimate revisions. The company's value proposition is also being compared favorably to peers, such as Elanco Animal Health Incorporated.

1.c. Company Highlights

Last Price	75.03
Change Percentage	-1.66%
Open	75.47
Previous Close	76.3
Market Cap ( Millions)	1141
Volume	152427
Year High	98.11
Year Low	62.77
M A 50	81.92
M A 200	78.3

FCF Yield	4.99%
Dividend Yield	2.40%
ROE	6.71%
Debt / Equity	31.28%
Net Debt / EBIDTA	111.11%
Price To Book	2.27
Price Earnings Ratio	34.16
Price To FCF	20.05
Price To sales	1.73
EV / EBITDA	11.14

2. U.S. Physical Therapy Delivers Strong Q3 2025 Earnings

U.S. Physical Therapy reported a robust financial performance in Q3 2025, with physical therapy revenues reaching $168.1 million, a 17.8% increase from the previous year. The company's adjusted EBITDA grew 13.2% to $23.9 million, and the physical therapy operating margin stood at 18.6%. Earnings per share (EPS) came in at $0.66, slightly below estimates of $0.67. The company's gross profit grew 30% despite a challenging inflationary environment and increased staff costs, as noted by Christopher Reading, "We've implemented various initiatives, including AI-driven documentation and semi-virtualization of our front desk operations, which have started to show positive impact."

Publication Date: Nov -18

                                    📋 Highlights
                                    Total Patient Visits Growth::
                                                18% increase driven by 84 net owned clinic additions in Q3 2025.
Gross Profit Expansion::
                                                30% growth amid inflation and staff cost challenges, aided by AI documentation and virtual front desk initiatives.
Adjusted EBITDA Performance::
                                                Rose $2.8 million (13.2%) to $23.9 million, with full-year 2025 guidance reaffirmed at $93–$97 million.
IIP Segment Strength::
                                                Net revenues grew 14.6% to $3.7 million, maintaining a 19.6% margin despite margin adjustments from amortization reallocation.
Medicare Reimbursement Outlook::
                                                CMS final rule sets a 1.5% floor for 2026 rate increases, with remote therapeutic monitoring resuming in 2026.

                                

Revenue Growth Drivers

The company's revenue growth was driven by an 18% increase in total patient visits, supported by 84 net owned clinic additions. The average visits per clinic per day reached 32.2, the highest third-quarter volume per clinic per day in the company's history. The Industrial Injury Prevention (IIP) segment also delivered a strong performance, with IIP net revenues increasing 14.6% and IIP income rising 10.7%.

Operational Efficiency

U.S. Physical Therapy has been focusing on operational efficiency, with initiatives such as AI-driven documentation and virtualization at the front desk. The company is also expecting benefits from its new ERP system, particularly in finance and accounting. Carey Hendrickson mentioned that the company is weighing share buybacks against M&A opportunities, with a focus on IIP acquisitions due to their attractive return dynamics.

Valuation Metrics

Using the current valuation metrics, the company's P/E Ratio stands at 31.87, P/B Ratio at 2.11, and EV/EBITDA at 10.47. These metrics suggest that the market is pricing in a certain level of growth and profitability. Analysts estimate next year's revenue growth at 6.4%, which may impact the company's valuation multiples. The company's Return on Equity (ROE) is 6.71%, and Net Debt / EBITDA is 1.11, indicating a relatively stable financial position.

Outlook

The company has reaffirmed its adjusted EBITDA guidance for full-year 2025, expecting it to be in the range of $93 million to $97 million. The outlook for 2026 appears positive, with expected growth in the IIP segment and potential benefits from the Medicare rate proposal. Christopher Reading noted that demand for physiotherapy services has been strong throughout the year, and the company is well-positioned to continue its growth trajectory.

3. NewsRoom

U.S. Physical Therapy, Inc. (NYSE:USPH) Given Consensus Recommendation of “Moderate Buy” by Analysts

Dec -03

Source: defenseworld.net

U.S. Physical Therapy, Inc. (USPH) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

U.S. Physical Therapy (USPH) Q3 Earnings Miss Estimates

Nov -06

Source: zacks.com

U.S. Physical Therapy Reports Third Quarter 2025 Results

Nov -05

Source: businesswire.com

ELAN vs. USPH: Which Stock Is the Better Value Option?

Oct -23

Source: zacks.com

ELAN or USPH: Which Is the Better Value Stock Right Now?

Oct -06

Source: zacks.com

ASTH vs. USPH: Which Stock Is the Better Value Option?

Aug -29

Source: zacks.com

ASTH or USPH: Which Is the Better Value Stock Right Now?

Aug -13

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.81%)

6. Segments

Physical Therapy

Expected Growth: 5.8%

U.S. Physical Therapy's 5.8% growth in Physical Therapy segment is driven by increasing demand for outpatient physical therapy services, aging population, and growing need for cost-effective treatment options. Additionally, the company's strategic acquisitions, expansion of service offerings, and strong operational efficiency also contribute to the growth.

Industrial Injury Prevention Services

Expected Growth: 5.9%

U.S. Physical Therapy's Industrial Injury Prevention Services growth is driven by increasing demand for workplace safety, rising healthcare costs, and growing awareness of occupational health risks. Additionally, the service's focus on prevention and early intervention resonates with employers seeking to reduce workers' compensation claims and improve productivity.

7. Detailed Products

Outpatient Clinics

U.S. Physical Therapy, Inc. operates outpatient physical therapy clinics that provide physical therapy, occupational therapy, and speech therapy services to patients.

Industrial Injury Prevention

The company offers industrial injury prevention services, including on-site physical therapy, ergonomic assessments, and injury prevention programs.

On-Site Physical Therapy

U.S. Physical Therapy, Inc. provides on-site physical therapy services to patients in their homes, offices, or other convenient locations.

Hand Therapy

The company offers specialized hand therapy services, including treatment for hand and upper extremity injuries and conditions.

Occupational Health Services

U.S. Physical Therapy, Inc. provides occupational health services, including pre-employment screenings, work conditioning, and return-to-work programs.

Sports Medicine

The company offers sports medicine services, including athletic training, sports performance training, and injury prevention programs.

8. U.S. Physical Therapy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for U.S. Physical Therapy, Inc. as the company provides specialized physical therapy services that are not easily substitutable.

Bargaining Power Of Customers

The bargaining power of customers is medium for U.S. Physical Therapy, Inc. as patients have some flexibility to choose from different physical therapy providers, but the company's strong reputation and quality of services limit the bargaining power of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for U.S. Physical Therapy, Inc. as the company is not heavily dependent on a single supplier, and there are many alternative suppliers available.

Threat Of New Entrants

The threat of new entrants is medium for U.S. Physical Therapy, Inc. as there are some barriers to entry, such as regulatory requirements and the need for specialized equipment and trained staff, but new entrants can still enter the market with sufficient resources and planning.

Intensity Of Rivalry

The intensity of rivalry is high for U.S. Physical Therapy, Inc. as the physical therapy industry is highly competitive, with many established players and a growing demand for services, leading to intense competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	27.64%
Debt Cost	4.77%
Equity Weight	72.36%
Equity Cost	10.85%
WACC	9.17%
Leverage	38.21%

11. Quality Control: U.S. Physical Therapy, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Healthcare Services Group

A-Score: 4.8/10

Value: 4.0

Growth: 2.9

Quality: 5.8

Yield: 2.0

Momentum: 9.5

Volatility: 4.7

1-Year Total Return ->

U.S. Physical Therapy

A-Score: 4.7/10

Value: 3.2

Growth: 3.3

Quality: 4.9

Yield: 4.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

Aveanna Healthcare

A-Score: 4.4/10

Value: 4.9

Growth: 6.4

Quality: 4.7

Yield: 0.0

Momentum: 9.5

Volatility: 1.0

1-Year Total Return ->

Pennant

A-Score: 3.8/10

Value: 3.1

Growth: 8.2

Quality: 3.9

Yield: 0.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

AMN Healthcare Services

A-Score: 3.4/10

Value: 9.2

Growth: 4.7

Quality: 3.0

Yield: 0.0

Momentum: 0.0

Volatility: 3.7

1-Year Total Return ->

The Joint

A-Score: 3.2/10

Value: 3.3

Growth: 3.3

Quality: 4.9

Yield: 0.0

Momentum: 3.5

Volatility: 4.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

6.92%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.17%

U.S. Physical Therapy, Inc. - US90337L1089

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on USPH

1.c. Company Highlights

Less Volatile

Expensive

Higher Yield

Earnings Miss

Revenues Beats

Earnings Beats

Revenues Miss

2. U.S. Physical Therapy Delivers Strong Q3 2025 Earnings

Revenue Growth Drivers

Operational Efficiency

Valuation Metrics

Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.81%)

6. Segments

Physical Therapy

Expected Growth: 5.8%

Industrial Injury Prevention Services

Expected Growth: 5.9%

7. Detailed Products

Outpatient Clinics

Industrial Injury Prevention

On-Site Physical Therapy

Hand Therapy

Occupational Health Services

Sports Medicine

8. U.S. Physical Therapy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: U.S. Physical Therapy, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

75.03$

Current Price

75.03$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA