Home Health, Post-Acute Care Stocks Down Across the Board

In a variable year characterized by almost monthly swings in stock performance, August resulted in tough blows for both the Home Health and Post-Acute Care Indices tracked by national healthcare mergers and acquisitions firm Stoneridge Partners.

Thanks to America’s rapidly aging population and the overall demand for senior care services, home health and post-acute care companies have seen far more ups than downs when it comes to the stock market over the past several years – and even with August’s downturn, their trajectory over time remains impressive. But a host of factors, including staff shortages due to the COVID-19 pandemic that continue to limit growth, are keeping providers on their heels.

“Nearly all the home health and post-acute care companies we track saw their stock prices drop last month,” Stoneridge Partners President and CEO Rich Tinsley says. “There’s no single reason for the across-the-board downturn – a combination of factors is at play, including the ongoing pandemic, which has made a pre-existing staff shortage grow even larger.”

Home Health and Post-Acute Care Indices

The Home Health (HHI) and Post-Acute Care (PAI) Indices were both down in August compared to the previous month. The HHI fell more than 22%, while the PAI dropped more than 14%.

Both indices underperformed the S&P 500, which was up nearly 3% in August compared to July.

Home Health Index

The Stoneridge Partners HHI follows the stock values of Amedisys, Inc. (Nasdaq: AMED) and LHC Group, Inc. (Nasdaq: LHCG).

Amedisys saw its stock fall almost 30% in August compared to July, marking the Baton Rouge, Louisiana-based company’s worst-performing month in recent history. Because of the dip in August, Amedisys’ stock is now down more than 24% compared to 12 months ago.

LHC Group also saw its stock drop more than 13% on a month-over-month basis. The Lafayette, Louisiana-based provider’s price is down more than 10% over the last 12 months.

Amedisys, which adjusted its 2021 guidance after releasing second-quarter financial results, has attributed operational struggles to the company’s large hospice segment.

“While our performance in the first half of 2021 has produced strong EBITDA and expanded margins, our Hospice segment is behind in both admission and average daily census growth,” Amedisys noted in a press release on its Q2 results. “The COVID-19 pandemic has put pressure on our ability to hire and retain business development employees at a level needed to achieve our internal growth targets.”

LHC Group affirmed its 2021 guidance for revenue and adjusted EBITDA.

Post-Acute Care Index

In addition to Amedisys and LHC Group, Stoneridge tracks the stock performance of Addus HomeCare Corporation (Nasdaq: ADUS), Brookdale Senior Living Inc. (NYSE: BKD), Encompass Health Corp. (NYSE: EHC) and The Pennant Group, Inc. (Nasdaq: PNTG) in its PAI.

Of those companies, only Frisco, Texas-based Addus posted a gain in August, with stock prices up almost 4% month over month.

“Addus announced that it doubled its credit facility to $600 million in August, and the company has suggested much of that will go toward its M&A pipeline,” said Tinsley. “Addus has mostly worked in the Medicaid personal care space, but it’s steadily building out its home health and hospice footprints as well.”

Meanwhile, Eagle, Idaho-based Pennant saw its stock drop nearly 11% in August compared to July, and Encompass Health saw its stock decline by almost 6% month over month. Brentwood, Tennessee-based Brookdale, which sold 80% of its home health and hospice segment to HCA Healthcare, Inc. (NYSE: HCA) earlier this summer, saw its stock fall nearly 3% in August.

“Brookdale had a difficult time with its health care services segment for a few quarters, but they were able to cash in on the strong demand for home health and hospice with the HCA sale,” Tinsley said.

Quote of the Month

“This workforce is in extremely high demand, driven primarily by the growing population of older adults. We’ve seen this workforce add millions of jobs over the past decade, and we can expect a million more in the next decade — more new jobs than any other occupation.” – Stephen McCall, a PHI data and policy analyst

Read the Full Article Here: Home Care Workforce Still Facing Widespread Economic Instability

Articles Featuring Stoneridge

Stoneridge Buy-Side Associate Partner Jenna Schwartz Helps to Find Your “Diamond in the Rough”. Click here to view the article.

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 September 2021 | Stoneridge Partners)

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

Company 8/31/21 1 mos change YTD change 8/31/20 8/31/19
Amedisys 183.45 -29.61% -37.46% 241.9 128.71
LHC Group 186.76 -26.56% -12.45% 208.44 118.5
HH Index* 185.11 -22.19% -26.93% 225.17 123.61
S&P 4522.68 +2.90% +20.41% 3505 2926.46
Addus 89.92 +3.61% -23.20% 93.66 87.98

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) 8/31/21 8/31/20 8/31/19
Amedisys 5940 8210 4490
LHC Group 5750 6440 4130
HH Index Total 11690 14650 8620
Addus 1540 1390 1150


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

Company 8/31/21 8/31/20 8/31/19
Amedisys 271% 416% 248%
LHC Group 269% 308% 203%
HH Index Average* 270% 362% 226%
Addus 189% 188% 203%


Multiples of EV/EBITDA

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

Company 8/31/21 8/31/20 8/31/19
Amedisys 15.54 33.92 24.92
LHC Group 24.19 30.79 20.33
HH Index Average* 19.87 32.36 22.63
Addus 22.69 24.93 27.74

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these six publicly traded post-acute care 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 September 2021 | Stoneridge Partners)

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Non-medical home care franchisee.  $9.6+M in revenue.  50% Medicaid/30% Private Pay/ 14% VA/ 6% Misc.  Experienced management team to stay post-transition.

 Home Care /  Multi-State

Hospice.  45+ ADC.  Rio Grande Valley.  No CAP or regulatory issues.

 Hospice /  Texas

$2M revenue home care agency.  100% private pay.  Primarily non-medical.  Skilled designation, not Medicare-certified.  W-2 caregivers.  Region 8.  Accredited.

 Home Care /  Florida

Profitable private-duty home health agency in Northern Virginia.  $1.5M in revenue.  20+ years in the community.

 Home Health /  Virginia

Profitable home care franchise with consistent sales growth.  Revenue of $1.3M.  Great reputation within the community.

 Home Care /  Iowa

$40M+ home care agency with 20+% AEBITDA.  Primarily private-duty, non-medical (90%).  Medicaid waiver programs.  40% family caregivers.  Multiple locations.

 Home Care /  Pennsylvania

Colorado Springs and surrounding areas.  Opportunity to grow existing small hospice.  Motivated Seller

 Hospice /  Colorado

Medicare-certified home health agency.  Houston/Kingwood area.  Approximately $600k in revenue.  Accredited.

 Home Health /  Texas

I/DD provider offering SCL & FHP services.  $3M in revenue.  Recent rate increase.

 I/DD /  Kentucky

Hospice.  30+ADC.  No CAP or regulatory issues.

 Hospice /  Illinois

Behavioral Health/Suboxone Clinic.  $900k in revenue.  21 years in business with stellar reputation.  Single office, great opportunities for expansion.  All cash paying patient base.

 Behavioral Health /  Kentucky

I/DD residential services.  $11M in revenue.  Highly profitable agency with long-standing reputation.  Community Residential Services (CRS) 4-bed model & Integrated Community Supports (ICS) apartment settings.

 I/DD /  Minnesota

Well established home health agency.  $4M in revenue.  Fully staffed.  Profitable.  Good history of compliance.

 Home Health /  Missouri

Home Health CON in Montgomery County.  Profitable agency generating over $1.3M in revenue.  95%+ Medicare.  Built in marketing relationship and growth potential.

 Home Health /  Maryland

Skilled Home Health & Private Duty. $4.4 million in revenue. 22% census increase over last year. Established over 23 years.

 Home Health /  Florida

Medicare/Medicaid Home Health agency. $8 million in revenue. Long history in the community.

 Home Health /  Oklahoma

86 patient hospice located Northeast of Houston, TX. $4M+ in revenue with 20% + adjusted EBITDA. Full staff in place. Excellent record of compliance.

 Hospice /  Texas

Medicare-certified home health agency. District 7. Census of approximately 30 patients. Accredited.

 Home Health /  Florida

Hospice. 150 ADC. Strong growth. Expertly run with administrative team willing to stay involved. No CAP or regulatory issues.

 Hospice /  Southwest

Mental Health Treatment Center. $1.1M in revenue. Long-established, profitable practice. Full spectrum of medical treatment and therapy services.

 Behavioral Health /  Indiana

Medical Staffing Agency. $4.6M in revenue. Established over 25 years. Excellent rapport with regional hospital network.

 Other /  Kentucky

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

 Home Health /  Kentucky / Popular

Home health with $8M 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

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

$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 / Popular

Home Health Index September 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