Services-Health Services
The Pennant Group, Inc. provides healthcare services in the United States. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, and counseling services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, meals, housekeeping, and assistance in the activities of daily living to seniors, who are independent or who require some support. The company operates home health, hospice, and senior living communities throughout Arizona, California, Colorado, Idaho, Iowa, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho.
Discounted Cash Flow Valuation of Pennant Group, Inc.
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $15.7M | $15.79M | $15.88M | $15.97M | $16.06M | $16.15M | $16.24M | $16.33M | $16.42M | $16.51M | $16.61M | $166.1M |
DCF | $13.73M | $12.01M | $10.5M | $9.182M | $8.029M | $7.021M | $6.139M | $5.368M | $4.694M | $4.105M | $41.05M | |
Value | $121.8M |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|
Net Margin | 3.9% | 5.5% | 0.75% | 4% | 0.49% | 1.4% | 2.5% | 2.9% |
ROA | - | 21% | 1.3% | 3.7% | 0.89% | 2.5% | 4.7% | 5.1% |
ROE | 16% | 24% | 3.6% | 15% | 1.9% | 5.3% | 9.2% | 10% |
The average Net Margin over the past 5 years is +2.43%.
The trend of Net Margin over the past 5 years is -0.48%.
The average ROA over the past 5 years is +5.68%.
The trend of ROA over the past 5 years is -2.31%.
The average ROE over the past 5 years is +9.89%.
The trend of ROE over the past 5 years is -2.36%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM | ||
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | - | 0.00 | 6.52 | 0.19 | -2.09 | -12.27 | 2.56 | 5.30 | ||
Debt Equity | - | 0.00 | 0.26 | 0.08 | 0.45 | 0.50 | 0.44 | 0.51 | ||
MIN | ||||||||||
Graham Stability | - | - | - | 100% | 19% | 98% | 100% | 19% |
The Debt/FCF trailing twelve month is 5.30.
The trend of Debt/FCF over the past 5 years is -1.31.
Graham’s Stability measure stands at 0.19.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2018 | 12-2020 | 12-2022 | Trend |
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Revenue | 14% | 12% | 15% | -0.84% |
Net Income | -3.1% | -4.9% | 100% | 14% |
Stockholders Equity | 17% | 13% | 16% | 0.23% |
FCF | 4.9% | -17% | - | 690% |
The Revenue CAGR over the past 5 years is +13.76%.
The trend of Revenue growth rate over the past 5 years is -0.84%.
The Earnings CAGR over the past 5 years is -3.13%.
The trend of Earnings growth rate over the past 5 years is +14.12%.
The Equity CAGR over the past 5 years is +17.39%.
The trend of Equity growth rate over the past 5 years is +0.23%.
The FCF CAGR over the past 5 years is +4.9%.
The trend of FCF growth rate over the past 5 years is +686.5%.