FARMINGTON, Utah - PACS Group, Inc. (NYSE: PACS), a major player in post-acute healthcare, announced a delay in the release of its third-quarter 2024 financial results. The company is currently under investigation due to third-party allegations related to its reimbursement and referral practices, which may align with recent civil investigative demands from the federal government.
Despite the ongoing investigation, PACS Group's CEO, Jason Murray, stands by the company's compliance record and points to strong preliminary third-quarter operating metrics as evidence of the company's robust financial health. Murray emphasized the company's dedication to high standards in patient care, business operations, and stakeholder engagement.
PACS Group reported that 183 of its skilled nursing facilities received a 4 or 5-star CMS QM rating, signifying high quality. The company's facilities maintained high occupancy rates, with ramping and mature facilities reaching 93.9% and 94.5% respectively, and an overall occupancy of 90.5%, surpassing the industry average of 77%.
The company also expanded its footprint by acquiring 56 new facilities across six states, bringing its total operations to 15 states with an addition of 2,889 skilled nursing beds and 1,334 assisted living and independent living units. This expansion is in line with PACS Group's mission to revolutionize post-acute care.
Financially, PACS Group expects to report over $600 million in cash and available liquidity by the end of the quarter, which suggests a solid balance sheet.
This news comes with the disclaimer that forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. The investigation's outcome remains uncertain, and the company has expressed its intention to cooperate fully with the government while maintaining confidence in its systems and controls.
The information for this report is based on a press release statement from PACS Group, Inc.
In other recent news, PACS Group has been the focus of multiple financial analysts, including UBS and Citi, both of which assigned a Buy rating to the healthcare services provider. UBS set a price target of $50.00, citing factors such as demographic trends and strategic acquisitions that could contribute to the company's growth. PACS Group's successful history of revitalizing underperforming facilities was also noted, which has led to enhanced occupancy rates and quality of care.
The company reported an adjusted EBITDA of $99.7 million for the second quarter of 2024, leading to an upward revision of its 2024 guidance. PACS Group has also expanded its operational footprint with the acquisition of 53 healthcare facilities from Prestige Care, extending its geographical reach to five new states.
In addition, PACS Group has initiated an underwritten public offering of approximately 13.9 million shares of its common stock, managed by several financial institutions, including Citigroup (NYSE:C), J.P. Morgan, and Truist Securities. Lastly, PACS Group has seen changes in its board committees, including the appointment of Evelyn Dilsaver as a Class II director. These recent developments highlight PACS Group's ongoing growth and financial success.
InvestingPro Insights
PACS Group's recent announcement of a delay in its third-quarter 2024 financial results due to an ongoing investigation has undoubtedly impacted investor sentiment. This is reflected in the company's recent stock performance, with InvestingPro data showing a significant 31.19% decline in the past week and a 23.27% drop over the last month.
Despite these challenges, PACS Group's financial metrics paint a more nuanced picture. The company's revenue for the last twelve months as of Q2 2024 stood at $3.56 billion, with a notable quarterly revenue growth of 29.08% in Q2 2024. This growth aligns with the company's reported expansion and acquisition of new facilities.
InvestingPro Tips highlight that four analysts have revised their earnings upwards for the upcoming period, suggesting some optimism about PACS Group's future performance despite the current investigation. Additionally, the company's profitability over the last twelve months and analysts' predictions of profitability for this year indicate underlying financial strength.
However, investors should note that PACS Group is trading at high valuation multiples, including a P/E ratio of 58.75 and a Price to Book ratio of 8.01. These figures suggest that the stock may be priced at a premium, which could be a consideration given the current uncertainties.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for PACS Group, providing deeper insights into the company's financial health and market position.
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