Post-Acute Care Stocks Cool Off

Home Health Index | 2021 February Update

Coming off a scorching performance in December, home health and post-acute care stocks gave back some of their impressive gains in January according to the latest Stoneridge Partners Home Health and Post-Acute Indices.

The Home Health Index (HHI) dipped by almost 4% last month; the Post-Acute Care Index (PAI) did slightly better, dropping by nearly 3.5%. The overall S&P also dropped by 0.6% last month, likely fueled by concerns about the new COVID-19 variants disrupting recovering economies, and raising – perhaps unfounded – fears about what the “January Barometer” means for the rest of 2021.

Nonetheless, the companies that make up the HHI and PAI are stronger than ever before.

“Home health and post-acute care providers performed incredibly well in 2020, and they are still in a much better position now than they were just a few months ago when we saw record numbers of new infections each day,” said Stoneridge Partners President Rich Tinsley. “That’s not to say they aren’t still dealing with a lot of operational challenges, so I think we will continue to see some ups and downs over the next several months. But we’ll learn more in the coming weeks as the companies start to discuss their Q4 financial results.”

Home Health Index

The monthly Stoneridge Partners HHI tracks stock values for Baton Rouge, Louisiana-based Amedisys, Inc. (Nasdaq: AMED) and Lafayette, Louisiana-based LHC Group, Inc. (Nasdaq: LHCG), two of country’s largest home-based care companies.

Amedisys saw its stock dip by almost 1.5% in January compared to December, though that had little effect on the company’s overall outstanding performance over the past year – its stock remained up by more than 63% at the end of last month compared to the prior 12 months. Similarly, LHC Group’s stock fell by nearly 6.7% in January, but was still up by more than 36% over the last 12 months.

“Executives from both LHC Group and Amedisys have talked about the historic levels of M&A activity they expect in 2021, so I think we’ll see their stock values surging as we head into March and beyond,” Tinsley said. “The wave of consolidation linked to the Patient-Driven Groupings Model (PDGM) may still be to come.”

Post-Acute Care Index

The PAI from Stoneridge combines the stock values for Amedisys and LHC Group with market performance results for Addus HomeCare Corporation (Nasdaq: ADUS), Brookdale Senior Living Inc. (NYSE: BKD), Encompass Health Corp. (NYSE: EHC) and The Pennant Group, Inc. (Nasdaq: PNTG).

Brookdale was the lone bright spot in January’s PAI, with its stock jumping up by nearly 12.5% in January. A sizable home health and hospice provider, the Brentwood, Tennessee-based Brookdale is also one of the largest owners and operators of senior living communities in the country.

In contrast, Frisco, Texas-based Addus’ stock was down 3.8% in January, and after months of consecutive gains, Eagle, Idaho-based Pennant saw its stock fall by 4.6% compared to the previous month. Birmingham, Alabama-based Encompass Health stocks dipped by just more than 2% during that same period.

Quote of the Month

“One of the things that PDGM did for us was promote continuous learning. The focus for PDGM was all about changing how we manage care. And then when COVID came along, it was a bit of a parallel; we switched to focusing on infection control and other wrinkles.” – MaineHealth Care at Home President Donna DeBlois

Read the Full Article Here: An Unexpected Savior: How PDGM Prep Helped Home Health Agencies Ease COVID-19’s Impact

Articles Featuring Stoneridge

National Healthcare M&A Firm Stoneridge Partners Announces Record Year, Expresses Optimism for 2021

View our quarterly M&A webinars on current valuation trends, deal flow, and pertinent regulatory changes in home health, home care, hospice, ID/DD, and behavioral health industries. Visit the Speaker Series Webinar Library on our website.

See It To Believe It!

The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)
(Home Health Index February 2021 | Stoneridge Partners)

Here are the results of the stock prices for the past two years:

Company 1/31/21 1 mos change YTD change 1/31/20 1/31/19
Amedisys 289.07 -1.45% -1.45% 176.49 131.12
LHC Group 199.11 -6.66% -6.66% 145.75 104.11
HH Index* 244.09 -3.65% -3.65% 161.12 117.62
S&P 3731.17 -0.66% -24.90% 3225.52 27.07.76
Addus 112.67 -3.77% -3.77% 94.34 60.93

Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.

Enterprise Value (EV)

EV (in M) 1/31/21 1/31/20 1/31/19
Amedisys 10370 6200 4170
LHC Group 6760 5000 3610
HH Index Total 17130 11200 7780
Addus 1950 1470 687

Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 1/31/21 1/31/20 1/31/19
Amedisys 513% 328% 257%
LHC Group 328% 243% 227%
HH Index Average* 421% 286% 242%
Addus 256% 222% 141%

Multiples of EV/EBITDA

Think of this as selling price as a multiple of EBITDA.

Company 1/31/21 1/31/20 1/31/19
Amedisys 39.29 32.96 25.39
LHC Group 31.17 23.30 27.09
HH Index Average* 35.23 28.13 26.24
Addus 32.25 31.59 18.35

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:

  • LHC Group (LHCG)
  • Amedisys (AMED)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.

The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology which may differ from that used by a company for its reporting. (Home Health Index February 2021 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Rethink First acquired Whil, a leading digital provider of mindfulness, stress resilience, mental well-being and sustainable performance solutions.
  • Grant Avenue Capital recently acquired Salt Lake City-based Valeo Home Health & Hospice from Eduro Healthcare, an operator of skilled nursing facilities.

Exclusively Listed For Sale By Stoneridge Partners

Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us; Stoneridge Partners

Medicare home health agency.  Health system relationship.  Rare KY CON opportunity, multiple counties

 Home Health /  Kentucky

Opportunity to establish a Houston-based hospice.  Low-census provider licensed for regions 3, 4, 5 and 6.

 Hospice /  Texas

Opportunity to establish a Medicare hospice and Medicare home health agency.  Greater Salt Lake city area.  Clean provider number with management and field staff in...

 Home Health /  Utah

Large, established franchise territory.  $2.5 million revenue.  Two offices with strong leadership teams in place.

 Home Care /  Michigan

ABA in-home and community-based autism treatment for children and families.  Located in Northeastern VA.  $1M in revenue.  Completely self-sufficient staff to remain.

 Other /  Virginia

Home health with $8+M in revenue.  Medicare/Medicaid-certified.  90+% traditional Medicare/episodic.  Services central Texas and licensed for entire state.  Strong management team in place.

 Home Health /  Texas

Private duty home care franchise.  $5M in revenue.  Quality track record with strong management team.  Excellent 18-year history,

 Home Care /  Colorado

Home care franchisee.  $8.4M in revenue.  Highly profitable agency.  Medicaid/private pay.

 Home Care /  Kentucky

Skilled home health agency.  JCAHO accredited, zero deficiencies.  Excellent reputation and referral relationships.  $400k in revenue, impressive growth potential.

 Home Health /  Colorado

Medicare-certified home health agency.  Houston-area.  Minimal census.

 Home Health /  Texas

Medicare-certified home health agency.  $1M+ in revenue.  Long-established agency with excellent community rapport.

 Home Health /  Texas

In-home DME manufacturer.  Patented mobility system.  $7.7M+ in revenue.  GSA/VA contract.  Strong industry supplier partnerships.

 Other /  California

Medicare-certified home health and hospice provider.  $19M in revenue.  Attractive strategic geography.

 Home Health /  Ohio

$1M in revenue.  Small Medicare home health agency.  Region 5.

 Home Health /  Florida

Private pay home care.  $1.6M in revenue.  Profitable, great reputation.  Tenured staff.

 Home Care /  Illinois

Medicare-certified home health agency.  District 3.  Approximately $700k in revenue.  Accredited.

 Home Health /  Florida

Medicare-certified home health agency.  District 5.  Minimal census.  Accredited.

 Home Health /  Florida

Co-occurring, dual-diagnosis, addiction and mental health treatment center, 13- year history.  PHP, IOP, OP levels of care, prime location and setting, treating SUD and multiple...

 Behavioral Health /  Arizona

$19.5M large home care franchisee.  89% Medicaid.  Well-established company operating more than 20 years.  Phenomenal year-over-year revenue growth.

 Home Care /  Illinois

$2.5M private pay home care agency.  20-year history, diverse referral sources.  Competitive bill rates.  Unique and successful recruiting and retention strategy.

 Home Care /  Virginia

$27M highly profitable, tech-enabled health care staffing company.  Provides on-demand workers for LTC facilities.  Impressive growth trends with extraordinary upside

 Other /  Midwest

Well-established and profitable franchisee.  Revenue of $4.9M.  Medicaid and private pay.

 Home Care /  Southwest

ABA in-home autism therapy for children.  $2.4M in revenue.  Strong growth and bottom line.

 Other /  California

Opportunity to acquire a Medicare-certified home health agency. JCAHO-accredited.  Zero deficiencies.  Region 9.

 Home Health /  Florida

Opportunity to acquire a Medicare-certified home health agency.  JACHO-accredited.  Zero deficiencies.  Minimal census.

 Home Health /  Pennsylvania

Opportunity to acquire a Medicare-certified home health agency.  Zero deficiencies.  Minimal census.

 Home Health /  Kansas

Rare southern hospice/home health CON opportunity.  $3.5M in revenue, 60+ hospice ADC.  Strong staff recruiting and retention.

 Home Health /  South

Medicaid/private pay, Medicare-certified.  $3 million in revenue.  CHAP-accredited.


4-star home health agency.  $2.5 million revenue.  Experienced management team.  Strong financials with outstanding local reputation.  Huge growth opportunities.

 Home Health /  Michigan

$1.5 million revenue chiropractic/physical therapy business.  High profit margin/low operating costs.  Diverse referral sources.

 Other /  Maryland

$3.3 million in revenue.  Autism center providing ABA, OT, PT and ST.  In-clinic and in-home services.

 Other /  Michigan

Non-skilled licensed home care organization.  Approx. $2 million in annual revenue.  Strong management team in place.  Southern California.

 Home Care /  California

Joint Commission-accredited psychiatric treatment center.  Residential, PHP, IOP, OP and home health services.  National referral base; reputation for excellence, innovation.  $3M EBITDA on $7M revenue...

 Behavioral Health /  Midwest

Central Ohio-based home health company with private pay.  $2.3 million in revenue.  13.5% EBITDA.  Strong growth trends, full staff in place.

 Home Health /  Ohio

$2+ million private pay.  Profitable with great reputation.

 Home Health /  Pennsylvania

Profitable hospice agency with $600,000 in revenue.  Ready to grow with full complement of staff in place.

 Hospice /  Pennsylvania

Hospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues.

 Hospice /  Texas / Popular

$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.

 Home Health /  New Mexico

Home Health Index February 2021 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index.” Rich can be reached at [email protected] or (239) 561-0826, and toll-free at 800-218-3944. Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Amedisys | LHC Group