Post-Acute Care Sector Rebounds to Finish 2021 on a High Note

The last month of 2021 finally brought some good news for home health and post-acute care providers, with stock values rebounding after months of volatility caused by the ongoing effects of the COVID-19 pandemic.

“The HHI fell sharply in mid-Q4, then bounced back in December prior to year-end,” said Brian Bruenderman, Managing Partner of national mergers and acquisitions advisory firm Stoneridge Partners. “Home health fared better than the post-acute industry overall, but all care segments are likely to face an uncertain start to the new year as the Omicron variant continues to spread.”

With Omicron surging across the country – comprising 73% of COVID cases as of the week ending Dec. 18 – hospitals have once again approached maximum capacity. That has increased demand for post-acute care services, but with fewer labor resources available to meet the need, providers continue to decline referrals due to workforce shortages.

Home Health Index

Despite staffing shortages and COVID-19-related operating challenges, home health companies are bullish about the future as demand for their services continues to grow.

The Stoneridge Partners Home Health Index (HHI), which tracks the stock prices of national home health providers Amedisys, Inc. (Nasdaq: AMED) and LHC Group, Inc. (Nasdaq: LHCG), rose nearly 18% in December, strongly outpacing S&P gains of 4%. LHC Group’s share price rose by 20%, while Amedisys saw an increase of 16%.

The 2022 outlook for Amedisys will not only be shaped by Omicron in 2022, but also by changes at the very top of the organization. The company announced in early January that chairman and CEO Paul Kusserow will retire as CEO on April 15, with current president and COO Chris Gerard stepping into the role.

Post-Acute Care Index

Post-acute care providers saw more modest gains during December, with the Post-Acute Care Index (PAI) rising nearly 2%.

Almost all companies in the PAI — which combines stock performance for Addus HomeCare Corporation (Nasdaq: ADUS), Brookdale Senior Living Inc. (NYSE: BKD), Encompass Health Corp. (NYSE: EHC) and The Pennant Group, Inc. (Nasdaq: PNTG) with results for Amedisys and LHC Group — saw increases in their share prices. The sole exception was Brookdale, which saw its share price fall nearly 12%.

While COVID-19, and the Omicron surge in particular, continues to impact the entire care landscape, many experts anticipate cases will soon fall as sharply as they rose during December and early January. This outlook is supporting a positive perspective for care providers as 2022 continues.

“With the strong demand for home-based care and pent-up demand that post-acute providers will experience in the near term, the market should see a bright future in the year ahead,” Bruenderman said.

Quote of the Month

“We’ve seen home care workers provide essential frontline care during the pandemic, but the reality is, they have been providing this type of care all along, but often not recognized for it.” – Dr. Madeline Sterling, Assistant Professor of Medicine at Weill Cornell Medicine

Read the Full Article Here: Paid Home Care Workers Go Well Beyond Standard Duties

Articles Featuring Stoneridge

Brian Bruenderman and Tom Lillis recently led a webinar for the National Association for Home Care & Hospice called “The State of the Market: From Valuations to Volume in 2022 and Beyond”, which was featured in the McKnight’s Home Care article, Home Care Sets Deal-Making Record in 2021 with 166 Transactions.

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)

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

Company 12/31/21 1 mos change YTD change 12/31/20 12/31/19
Amedisys 161.88 +15.92% -44.81% 293.33 166.2
LHC Group 137.23 +19.62% -35.67% 213.32 137.76
HH Index* 149.56 +4.36% -40.96% 253.33 151.98
S&P 4766.18 +4.36% +26.89% 3756.07 3230.78
Addus 93.51 +7.21% -20.14% 117.09 97.22

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) 2021 2020 2019
Amedisys 5240 9920 5690
LHC Group 4220 6610 4750
HH Index Total 9460 16530 10440
Addus 1460 1780 1340


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

Company 2021 2020 2019
Amedisys 257% 491% 301%
LHC Group 215% 320% 231%
HH Index Average* 236% 406% 266%
Addus 188% 234% 224%

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 January 2022 | Stoneridge Partners)

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

 Home Care /  Southwest / New

Private-duty home care.  Projected 2022 revenue of $2M.  Strong bottom line.

 Home Care /  Virginia

Hospice.  135+ADC.  Accredited.  No CAP or regulatory issues.

 Hospice /  Arizona

Clinical trial pharmacy with $30M in revenue.  Long operating history.  Highly profitable with nice growth trends.

 Pharmacy /  Northeast

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.

 Massachusetts

$3M pediatric agency in Chicago.  Long-term management in place.

 Other /  Illinois

Private duty home care franchise.  Dual-licensed home health/home care companion agency.  $1M+ in revenue. Attractive market with excellent growth potential.

 Home Care /  Florida

Large home care franchisee.  $5M in revenue.  100% private pay.  Consistent growth trajectory.

 Home Care /  Virginia

$1.5 million home health company.  Medicare/Medicaid-certified.  Primarily skilled services.  80+% HMO.  15+% Medicare.

 Home Health /  Massachusetts

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

Medicare/Medicaid-certified home health organization.  $8+ million in annual revenue.  Diverse payor sources.  Multiple locations.

 Home Health /  Ohio

Approx. $700,000 non-skilled home health company.  Located in Florida's panhandle.  Accredited.  1/4 Private, 1/4 VA, 1/2 Medicaid waiver.  All employees are W-2.

 Home Health /  Florida

$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

Large home care franchisee.  $6.5 million in revenue.  Private duty.  Attractive market with great growth potential.

 Home Care /  Florida

Non-medical home care franchisor.  Platform opportunity with national footprint.  Systemwide revenues more than $12 million.  Franchise locations in 16 states.

 Home Care /  Texas

$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

CHAP-accredited private duty business.  $2.8 million projected 2021 revenue.  Workers' compensation primary source of revenue.  Regions 9, 10 and 11.

 Home Health /  Florida

Very rare opportunity in a CON state.  Located in Davidson County in Nashville, TN.  2020 revenue in excess of $650,000.

 Home Health /  Tennessee

Non-skilled home care company.  $10+ million in annual revenue.  Predominantly Medicaid.  Highly profitable.  Accredited.  Strong management team in place.

 Home Care /  Northeast

$1 million Medicare home health agency in northwest Minnesota.  Well-established.  Diverse referral sources.  Long history of excellent care.

 Home Health /  Minnesota

$4.9 million Medicare home health agency located in Phoenix, Arizona.  Showing strong year over year revenue growth since 2018.  Diverse referral sources, well run with...

 Home Health /  Arizona

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

 Hospice /  Texas

$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 January 2022 | Stoneridge Partners

From Brian Bruenderman, Publisher of “Home Health Index.” Brian 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