PENNANT GROUP INC/THE (PNTG) Stock Fundamental Analysis
NASDAQ:PNTG - Nasdaq - US70805E1091 - Common Stock - Currency: USD
PNTG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 104 industry peers in the Health Care Providers & Services industry. Both the profitability and the financial health of PNTG get a neutral evaluation. Nothing too spectacular is happening here. PNTG is not overvalued while it is showing excellent growth. This is an interesting combination. With these ratings, PNTG could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
PNTG had positive earnings in the past year.
In the past year PNTG had a positive cash flow from operations.
Each year in the past 5 years PNTG has been profitable.
PNTG had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
PNTG has a better Return On Assets (3.57%) than 71.15% of its industry peers.
PNTG has a Return On Equity of 8.56%. This is in the better half of the industry: PNTG outperforms 70.19% of its industry peers.
PNTG has a Return On Invested Capital (4.75%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for PNTG is significantly below the industry average of 9.61%.
The last Return On Invested Capital (4.75%) for PNTG is above the 3 year average (3.91%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.57% | ||
| ROE | 8.56% | ||
| ROIC | 4.75% |
ROA(3y)2.36%
ROA(5y)2.14%
ROE(3y)7.56%
ROE(5y)8.28%
ROIC(3y)3.91%
ROIC(5y)3.28%
1.3 Margins
PNTG has a better Profit Margin (3.36%) than 66.35% of its industry peers.
In the last couple of years the Profit Margin of PNTG has grown nicely.
Looking at the Operating Margin, with a value of 5.17%, PNTG is in the better half of the industry, outperforming 60.58% of the companies in the same industry.
In the last couple of years the Operating Margin of PNTG has grown nicely.
PNTG has a Gross Margin (20.32%) which is in line with its industry peers.
PNTG's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.17% | ||
| PM (TTM) | 3.36% | ||
| GM | 20.32% |
OM growth 3Y49.09%
OM growth 5Y24.56%
PM growth 3Y74.18%
PM growth 5Y34.45%
GM growth 3Y1.25%
GM growth 5Y-2.76%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PNTG is destroying value.
Compared to 1 year ago, PNTG has more shares outstanding
The number of shares outstanding for PNTG has been increased compared to 5 years ago.
PNTG has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 2.61 indicates that PNTG is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of PNTG (2.61) is comparable to the rest of the industry.
The Debt to FCF ratio of PNTG is 1.53, which is an excellent value as it means it would take PNTG, only 1.53 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 1.53, PNTG belongs to the best of the industry, outperforming 85.58% of the companies in the same industry.
PNTG has a Debt/Equity ratio of 0.12. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.12, PNTG is in the better half of the industry, outperforming 73.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 1.53 | ||
| Altman-Z | 2.61 |
ROIC/WACC0.52
WACC9.16%
2.3 Liquidity
PNTG has a Current Ratio of 1.21. This is a normal value and indicates that PNTG is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of PNTG (1.21) is comparable to the rest of the industry.
PNTG has a Quick Ratio of 1.21. This is a normal value and indicates that PNTG is financially healthy and should not expect problems in meeting its short term obligations.
PNTG has a Quick ratio (1.21) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 1.21 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 20.93% over the past year.
PNTG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 50.93% yearly.
The Revenue has grown by 30.58% in the past year. This is a very strong growth!
Measured over the past years, PNTG shows a quite strong growth in Revenue. The Revenue has been growing by 15.48% on average per year.
EPS 1Y (TTM)20.93%
EPS 3Y26.9%
EPS 5Y50.93%
EPS Q2Q%12.5%
Revenue 1Y (TTM)30.58%
Revenue growth 3Y16.5%
Revenue growth 5Y15.48%
Sales Q2Q%30.08%
3.2 Future
PNTG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.77% yearly.
PNTG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.10% yearly.
EPS Next Y21.1%
EPS Next 2Y17.95%
EPS Next 3Y15.77%
EPS Next 5YN/A
Revenue Next Year23.64%
Revenue Next 2Y15.65%
Revenue Next 3Y13.1%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PNTG is valuated rather expensively with a Price/Earnings ratio of 24.19.
Compared to the rest of the industry, the Price/Earnings ratio of PNTG indicates a somewhat cheap valuation: PNTG is cheaper than 63.46% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of PNTG to the average of the S&P500 Index (26.86), we can say PNTG is valued inline with the index average.
PNTG is valuated rather expensively with a Price/Forward Earnings ratio of 19.24.
PNTG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. PNTG is cheaper than 62.50% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.94, PNTG is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.19 | ||
| Fwd PE | 19.24 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PNTG is on the same level as its industry peers.
PNTG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.98 | ||
| EV/EBITDA | 18.3 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of PNTG may justify a higher PE ratio.
A more expensive valuation may be justified as PNTG's earnings are expected to grow with 15.77% in the coming years.
PEG (NY)1.15
PEG (5Y)0.47
EPS Next 2Y17.95%
EPS Next 3Y15.77%
5. Dividend
5.1 Amount
PNTG does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
25.16
+0.16 (+0.64%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners92.21%
Inst Owner Change-0.1%
Ins Owners4.66%
Ins Owner Change1.43%
Market Cap869.53M
Analysts81.82
Price Target33.46 (32.99%)
Short Float %1.8%
Short Ratio1.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.75%
Min EPS beat(2)-1.96%
Max EPS beat(2)11.46%
EPS beat(4)2
Avg EPS beat(4)4.59%
Min EPS beat(4)-1.96%
Max EPS beat(4)11.46%
EPS beat(8)5
Avg EPS beat(8)5.38%
EPS beat(12)6
Avg EPS beat(12)0.86%
EPS beat(16)7
Avg EPS beat(16)-2.83%
Revenue beat(2)2
Avg Revenue beat(2)2.14%
Min Revenue beat(2)2.09%
Max Revenue beat(2)2.19%
Revenue beat(4)3
Avg Revenue beat(4)1.36%
Min Revenue beat(4)-0.34%
Max Revenue beat(4)2.19%
Revenue beat(8)7
Avg Revenue beat(8)3.29%
Revenue beat(12)11
Avg Revenue beat(12)2.98%
Revenue beat(16)13
Avg Revenue beat(16)2.41%
PT rev (1m)-2.38%
PT rev (3m)4.96%
EPS NQ rev (1m)2.11%
EPS NQ rev (3m)2.65%
EPS NY rev (1m)0%
EPS NY rev (3m)1.92%
Revenue NQ rev (1m)2.36%
Revenue NQ rev (3m)6.8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.19 | ||
| Fwd PE | 19.24 | ||
| P/S | 1.09 | ||
| P/FCF | 35.98 | ||
| P/OCF | 20.86 | ||
| P/B | 2.78 | ||
| P/tB | 22 | ||
| EV/EBITDA | 18.3 |
EPS(TTM)1.04
EY4.13%
EPS(NY)1.31
Fwd EY5.2%
FCF(TTM)0.7
FCFY2.78%
OCF(TTM)1.21
OCFY4.79%
SpS23.12
BVpS9.07
TBVpS1.14
PEG (NY)1.15
PEG (5Y)0.47
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.57% | ||
| ROE | 8.56% | ||
| ROCE | 6.39% | ||
| ROIC | 4.75% | ||
| ROICexc | 4.86% | ||
| ROICexgc | 8.57% | ||
| OM | 5.17% | ||
| PM (TTM) | 3.36% | ||
| GM | 20.32% | ||
| FCFM | 3.03% |
ROA(3y)2.36%
ROA(5y)2.14%
ROE(3y)7.56%
ROE(5y)8.28%
ROIC(3y)3.91%
ROIC(5y)3.28%
ROICexc(3y)4%
ROICexc(5y)3.33%
ROICexgc(3y)6.26%
ROICexgc(5y)5.05%
ROCE(3y)5.26%
ROCE(5y)4.41%
ROICexcg growth 3Y73.2%
ROICexcg growth 5Y43.25%
ROICexc growth 3Y62.52%
ROICexc growth 5Y34.54%
OM growth 3Y49.09%
OM growth 5Y24.56%
PM growth 3Y74.18%
PM growth 5Y34.45%
GM growth 3Y1.25%
GM growth 5Y-2.76%
F-Score7
Asset Turnover1.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.12 | ||
| Debt/FCF | 1.53 | ||
| Debt/EBITDA | 0.76 | ||
| Cap/Depr | 235.42% | ||
| Cap/Sales | 2.19% | ||
| Interest Coverage | 8.08 | ||
| Cash Conversion | 85.47% | ||
| Profit Quality | 90.11% | ||
| Current Ratio | 1.21 | ||
| Quick Ratio | 1.21 | ||
| Altman-Z | 2.61 |
F-Score7
WACC9.16%
ROIC/WACC0.52
Cap/Depr(3y)260.04%
Cap/Depr(5y)213.36%
Cap/Sales(3y)2.47%
Cap/Sales(5y)2.14%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)20.93%
EPS 3Y26.9%
EPS 5Y50.93%
EPS Q2Q%12.5%
EPS Next Y21.1%
EPS Next 2Y17.95%
EPS Next 3Y15.77%
EPS Next 5YN/A
Revenue 1Y (TTM)30.58%
Revenue growth 3Y16.5%
Revenue growth 5Y15.48%
Sales Q2Q%30.08%
Revenue Next Year23.64%
Revenue Next 2Y15.65%
Revenue Next 3Y13.1%
Revenue Next 5YN/A
EBIT growth 1Y36.9%
EBIT growth 3Y73.69%
EBIT growth 5Y43.85%
EBIT Next Year36.58%
EBIT Next 3Y19.48%
EBIT Next 5YN/A
FCF growth 1Y157.4%
FCF growth 3YN/A
FCF growth 5Y46.34%
OCF growth 1Y111.88%
OCF growth 3YN/A
OCF growth 5Y32.7%