The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Brookdale (NYSE: BKD) and the rest of the senior health, home health & hospice stocks fared in Q3.
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 satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 1.8%.
In light of this news, share prices of the companies have held steady as they are up 2.1% on average since the latest earnings results.
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 $813.2 million, up 3.7% year on year. This print fell short of analysts’ expectations by 1.7%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates and a miss of analysts’ revenue estimates.
"Brookdale's solid third quarter results highlight the underlying strength of our company amidst the accelerating tailwind from increasing demand for senior living coupled with suppressed inventory growth," said Nick Stengle, Brookdale's Chief Executive Officer.
Brookdale delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 15.2% since reporting and currently trades at $10.52.
Read our full report on Brookdale here, it’s free for active Edge members.
Best Q3: 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 $229 million, up 26.8% year on year, outperforming analysts’ expectations by 3%. The business had a very strong quarter with full-year revenue guidance exceeding analysts’ expectations and a solid beat of analysts’ revenue estimates.
The Pennant Group achieved the fastest revenue growth and highest full-year guidance raise among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $25.25.
Is now the time to buy The Pennant Group? Access our full analysis of the earnings results here, it’s free for active Edge members.
Chemed (NYSE: CHE)
With a unique business model combining end-of-life care and household services, Chemed (NYSE: CHE) operates two distinct businesses: VITAS, which provides hospice care for terminally ill patients, and Roto-Rooter, which offers plumbing and water restoration services.
Chemed reported revenues of $624.9 million, up 3.1% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and revenue in line with analysts’ estimates.
Interestingly, the stock is up 1.9% since the results and currently trades at $447.40.
Read our full analysis of Chemed’s results here.
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 $3.33 billion, up 14.7% year on year. This number surpassed analysts’ expectations by 5.3%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
BrightSpring Health Services scored the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is flat since reporting and currently trades at $33.73.
Addus HomeCare (NASDAQ: ADUS)
Serving approximately 66,000 clients across 22 states with a focus on "dual eligible" Medicare and Medicaid beneficiaries, Addus HomeCare (NASDAQ: ADUS) provides in-home personal care, hospice, and home health services to elderly, chronically ill, and disabled individuals.
Addus HomeCare reported revenues of $362.3 million, up 25% year on year. This print beat analysts’ expectations by 2.2%. It was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
The stock is down 4.3% since reporting and currently trades at $113.76.
Read our full, actionable report on Addus HomeCare here, it’s free for active Edge members.
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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