Home Health Index December Update

No single theme dominated the home health and post-acute care indices in 2023. At year’s end, there were companies up big, and companies down big.

The reasons for that are hard to decipher. But there are some signs to point toward.

Amedisys Inc. (Nasdaq: AMED), for one, is up because UnitedHealth Group (NYSE: UNH) plans to take it over. Enhabit Inc. (NYSE: EHAB) is down because of staffing and Medicare Advantage (MA) headwinds, which led to its strategic review in the first place.

On the other end, Addus is down over 6% on the year. The company has had what its leaders would likely consider a successful year, but its stock price could be down simply because of a rule proposed by the Centers for Medicare & Medicaid Services (CMS) regarding mandates for caregiver wages in home- and community-based services.

The Pennant Group is up over 25%, and continues to blaze the M&A trail. Aveanna Healthcare Holdings (Nasdaq: AVAH) is down nearly 2%.

Whether they increased their stock prices in 2024 or not, all of these companies are hoping for a better year in 2024 – whether in macroeconomics, workforce, regulatory or something else.

“It was a tough operating environment for most post-acute and home health companies in 2023,” says Joe Lynch, partner and managing director at Stoneridge Partners. “These companies are battle tested, but 2024 is likely to come with a lot of the same challenges.”

Home Health Index

Enhabit should be nearing a sale sooner rather than later. Its earnings call in February should lead to further clarity on its future.

In December, its stock price dipped by 3%. Overall, the company is down 58% since it went public back in June of 2022, from a stock price of $24 to around $10 at the close of December.

Where Enhabit lands will be of great interest. After all, it’s an at-scale, independent home health and hospice provider. There aren’t many of those left.

Once UnitedHealth Group’s Optum closes on its deal for Amedisys, it will own about 10% of the home health market. That’s considering Amedisys will be under the same umbrella as LHC Group.

Another company — such as Humana Inc. (NYSE: HUM) — could try to bolster its footprint to about that size with a purchase of Enhabit. But at the same time, Humana has itself been in transaction rumors.

Amedisys has hovered around its sell price over the course of the last six months. It’s up over 13% on the year and was up over 1% in December.

Post-Acute Care Index

In November, Aveanna was one of the big winners, gaining over 50% in one month alone. In December, things cooled down. The company was down by about 1% month over month.

In December, it found its new CFO in Matt Buckhalter. Aveanna has had a lot of leadership turnover over the past year, but things finally seem to be settling.

Buckhalter was the interim CFO and was ultimately given the keys to the permanent position.

“Matt has provided strong financial leadership and continuity as we build on our recent successes to transform our business,” Aveanna CEO Jeff Shaner said in a statement. “I have great confidence in the collaborative relationship between Matt, serving as our chief financial officer, and Deborah Stewart, continuing to serve in her role as our principal accounting officer. The leadership they bring to our accounting and finance teams, and Aveanna overall, is critical as we focus on executing our key initiatives into 2024.”

All the while, Pennant continued its upward trajectory. It was up over 1% in the month and, again, up 26.78% on the year.

The company continues to execute on home health and hospice deals, which will likely be a trend in 2024 as well.

It also entered a home health joint venture with John Muir Health at the start of the year.

“We are thrilled to begin operating this joint venture,” Pennant CEO Brent Guerisoli said in a statement. “Muir Home Health will bring together the deep experience of one of the Bay Area’s premier health systems with Pennant’s deep experience in managing and supporting the delivery of life-changing home health services. This collaboration will create a unique continuum of care that will benefit Bay Area residents for many years to come.”

Quote of the Month

“Where we can bring together a continuum of services and infuse innovation, the result is a game-changer for our seniors because it simplifies the health care experience, his work is especially important given the persistent staffing challenges that are not going away anytime soon, and are more acute in rural areas, where 70% of our residents live.” -Nate Schema, President and CEO of The Evangelical Lutheran Good Samaritan Society

Read the Full Article Here: Nursing Homes’ Road From Recovery to Stability Under Threat

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:

*NOTE: LHC Group was officially delisted from the Nasdaq when UnitedHealth Group’s (NYSE: UNH) acquisition of it was finalized. While LHC Group is now gone from the HHI, Enhabit has been added in the past year. The numbers below are reflected as such.

  • Amedisys (AMED)
  • Enhabit (EHAB)

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

Company12/31/231 mos changeYTD change12/31/2212/31/21
Amedisys95.06+1.56+13.79%83.54161.88
Enhabit10.35-3.00%-21.35%
HH Index*52.71+1.11%-57.02%122.62149.56
S&P4769.83+4.24%+23.01%3877.674766.18
Addus92.85+6.09%-6.67%99.4993.51

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)202320222021
Amedisys351027605240
Enhabit1110
HH Index Total462086609460
Addus164016501460

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

Company202320222021
Amedisys158%149%257%
Enhabit105%
HH Index Average*132%203%236%
Addus160%189%188%

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:

  • Aveanna (AVAH)
  • Amedisys (AMED)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Enhabit (EHAB)
  • Brookdale Senior Living Inc. (BKD)

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

Company12/31/231 mos changeYTD change12/31/2212/31/21
Amedisys95.06+1.56%+13.79%83.54161.88
Addus92.85+6.09%-6.67%99.4993.51
Pennant13.92+1.44%+26.78%10.9823.08
Brookdale5.82+8.93%+113.19%2.735.16
Enhabit10.35-3.00%-21.35%13.16
Aveanna2.68-1.87%+243.59%0.78

Enterprise Value (EV)

EV (in M)202320222021
Amedisys351027605240
Addus164016501460
Pennant733641924
Brookdale556526569
Enhabit1110
Aveanna1810

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

Company202320222021
Amedisys158%149%257%
Addus160%189%188%
Pennant140%139%212%
Brookdale189%195%198%
Enhabit105%
Aveanna97%

This graph displays 24 months of Post-Acute Care Index performance.

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 December 2023 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Residential Hospice has acquired Illinois-based Safe Haven Hospice from the senior living provider Christian Horizons.

  • Fortis Health Acquires Physiocare Home Health and Hospice.

  • Uwill Acquires Christie Campus Health, Expands College Mental Health Services.

  • New Day Healthcare Acquires Compassion Hospice.

SOLD by Stoneridge!!!

  • Stoneridge Partners is proud to announce the successful sale of an Intellectual and Developmental Disabilities Agency in Minnesota.
  • Stoneridge Partners is proud to announce the successful sale of a Home Health Care Agency in Missouri.
  • Stoneridge Partners is proud to announce the successful sale of a Home Health Care Agency in Pennsylvania.

View Stoneridge closed transactions on our website

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 at Stoneridge Partners.

Hospice.  100+ ADC.  Multi-location.  No CAP or regulatory issues.

 Hospice /  Texas / New

Large multi-discipline pediatric therapy practice.  $5+M in revenue.  Multiple offices with a wide geographical footprint.  Full compliment of management and staff in place.

 Other /  Multi-State / New

Medicare-certified home health.  Opportunity to establish home health presence in Texas.  Minimal census.

 Home Health /  Texas

$14.9M in revenue with $3M of EBITDA.  Second largest residential treatment provider for SUD in KY.  Over 350 beds for residential, PHP, IOP, and OP...

 Behavioral Health /  Kentucky

$4.1M+ in revenue with $1.7M+ of EBITDA.  Community-based outreach program offering mental health services to primarily children and adolescents.  High barrier to entry; accreditation required....

 Behavioral Health /  Ohio

$4.5+M Houston-based Medicaid home care company.  Established 13 years ago.  Excellent HHSC contracts are in place, resulting in an impressive bottom line.  Fully staffed.

 Home Care /  Texas

Non-medical home care franchise.  $2M in revenue.  60% private pay.  20% EBITDA.  Houston market.

 Home Care /  Texas

Medicare/Medicaid-certified home health agency.  $1.4M in revenue.  District 9.  Profitable.  Accredited.

 Home Health /  Florida

Behavioral health, therapy, and educational services business.  $1.8M in revenue with over $600,000 EBITDA.  Services include ABA, early intervention services to children aged 0-21, and...

 Behavioral Health /  Pennsylvania

Home Care Agency.  $12M in revenue.  97% Medicaid.  Highly profitable agency with strong growth trajectory.

 Home Care /  Kansas

$3.2 million in revenue.  JCAHO accredited Home Health company.  Showing remarkable growth trends and is very profitable.

 Home Health /  Texas

Home Health & Hospice with $4.5M in revenue.  Medicare/Medicaid certified.  Excellent growth potential in large service area.

 Other /  Arizona

Hospice with $2.4M+ in revenue.  Medicare/Medicaid certified.  Full complement of staff in place.

 Hospice /  Texas

Home care agency.  $30M+ in revenue.  95% Medicaid.  Platform opportunity.

 Home Care /  New Mexico

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

 Home Health /  Illinois

Medicaid-certified home care.  Minimal census.  Opportunity to establish home care presence in Texas.

 Home Care /  Texas

Hospice business.  Low census.  The license covers all of Clark County (Las Vegas and Henderson)

 Hospice /  Nevada

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 / Popular

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

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 / Popular

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

 Home Health /  Texas

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

Home Health Index December 2023 | Stoneridge Partners

From Joe Lynch, Publisher of “Home Health Index.” Joe 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.