As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at senior health, home health & hospice stocks, starting with Brookdale (NYSE:BKD).
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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2%.
Thankfully, share prices of the companies have been resilient as they are up 9% 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 $812.9 million, up 4.6% year on year. This print fell short of analysts’ expectations by 0.6%. Overall, it was a softer quarter for the company with a significant miss of analysts’ EPS estimates and a slight miss of analysts’ revenue estimates.
"As a result of our continued operational execution and strong occupancy performance, we were able to raise our annual guidance ranges for a second consecutive quarter," said Denise Warren, Brookdale's Interim Chief Executive Officer and Chairman.
Brookdale delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 14.6% since reporting and currently trades at $8.93.
Read our full report on Brookdale here, it’s free for active Edge members.
Best Q2: 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 $3.15 billion, up 29.1% year on year, outperforming analysts’ expectations by 5.2%. The business had a very strong quarter with an impressive beat of analysts’ revenue and EPS estimates.
BrightSpring Health Services pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 47.6% since reporting. It currently trades at $30.50.
Is now the time to buy BrightSpring Health Services? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: 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 $618.8 million, up 3.8% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 6.5% since the results and currently trades at $436.29.
Read our full analysis of Chemed’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 $800.4 million, flat year on year. This result was in line with analysts’ expectations. Taking a step back, it was a slower quarter as it logged a significant miss of analysts’ EPS estimates and revenue in line with analysts’ estimates.
AdaptHealth pulled off the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is up 1.3% since reporting and currently trades at $9.25.
Read our full, actionable report on AdaptHealth here, it’s free for active Edge members.
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 $219.5 million, up 30.1% year on year. This print beat analysts’ expectations by 4.2%. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ full-year EPS guidance estimates and a solid beat of analysts’ revenue estimates.
The Pennant Group scored the fastest revenue growth among its peers. The stock is up 8.8% since reporting and currently trades at $24.24.
Read our full, actionable report on The Pennant Group here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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