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:

Company 12/31/23 1 mos change YTD change 12/31/22 12/31/21
Amedisys 95.06 +1.56 +13.79% 83.54 161.88
Enhabit 10.35 -3.00% -21.35%
HH Index* 52.71 +1.11% -57.02% 122.62 149.56
S&P 4769.83 +4.24% +23.01% 3877.67 4766.18
Addus 92.85 +6.09% -6.67% 99.49 93.51

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) 2023 2022 2021
Amedisys 3510 2760 5240
Enhabit 1110
HH Index Total 4620 8660 9460
Addus 1640 1650 1460

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

Company 2023 2022 2021
Amedisys 158% 149% 257%
Enhabit 105%
HH Index Average* 132% 203% 236%
Addus 160% 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:

Company 12/31/23 1 mos change YTD change 12/31/22 12/31/21
Amedisys 95.06 +1.56% +13.79% 83.54 161.88
Addus 92.85 +6.09% -6.67% 99.49 93.51
Pennant 13.92 +1.44% +26.78% 10.98 23.08
Brookdale 5.82 +8.93% +113.19% 2.73 5.16
Enhabit 10.35 -3.00% -21.35% 13.16
Aveanna 2.68 -1.87% +243.59% 0.78

Enterprise Value (EV)

EV (in M) 2023 2022 2021
Amedisys 3510 2760 5240
Addus 1640 1650 1460
Pennant 733 641 924
Brookdale 556 526 569
Enhabit 1110
Aveanna 1810

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

Company 2023 2022 2021
Amedisys 158% 149% 257%
Addus 160% 189% 188%
Pennant 140% 139% 212%
Brookdale 189% 195% 198%
Enhabit 105%
Aveanna 97%

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.

Home care provider with over 200 clients.  Holder of four recently renewed contracts with ASAP providers.  Fully burdened P&L offers room for profitability gains.  Growth...

 Home Care /  Massachusetts

Home health agency.  Opportunity to establish a presence in Tennessee.  Covers Davidson (Nashville) and 8 surrounding counties.  Certificate of need - very rate in Tennessee.

 Home Health /  Tennessee

Behavioral health services.  $25+M in revenue.  Residential care facilities, inpatient psych/outpatient mental health support services, and counseling for adults and elderly patients.  Platform opportunity with...

 Behavioral Health /  California

Skilled home health agency.  Servicing Central Florida for over 20 years.  Census approximately 35.

 Home Health /  Florida

Houston-based home health company.  $7+M in revenue.  Profitable.  Well established within the community.  Showing positive growth trends.

 Home Health /  Texas

Occupational therapy practice with 2 offices in Southern California. Hand and upper extremity specialists.  20-plus years in the community.  Strong referral relationships.  Management and staff...

 Other /  California

Hospice.  100+ ADC.  Accredited.  No CAP or regulatory issues.

 Hospice /  Pennsylvania

$5M in revenue.  Located in Northern/Richmond VA.  Health system-owned Medicare home health and hospice.  Growing organization.

 Home Health

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

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

 Home Health /  Texas

$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

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

 Hospice /  Texas

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 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 / Popular

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.