Select Medical (NYSE:SEM) Shares Down 6.2% After Earnings Miss

Select Medical Holdings Corporation (NYSE:SEM)’s share price fell 6.2% during mid-day trading on Friday after the company announced weaker than expected quarterly earnings. The stock traded as low as $14.53 and last traded at $15.0910. 298,045 shares changed hands during mid-day trading, a decline of 56% from the average session volume of 682,209 shares. The stock had previously closed at $16.08.

The health services provider reported $0.16 EPS for the quarter, missing the consensus estimate of $0.23 by ($0.07). The firm had revenue of $1.40 billion for the quarter, compared to analyst estimates of $1.36 billion. Select Medical had a return on equity of 7.26% and a net margin of 2.68%.The business’s revenue was up 6.4% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.18 earnings per share. Select Medical has set its FY 2026 guidance at 1.220-1.320 EPS.

Select Medical Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, March 12th. Shareholders of record on Monday, March 2nd will be paid a dividend of $0.0625 per share. This represents a $0.25 annualized dividend and a yield of 1.7%. The ex-dividend date is Monday, March 2nd. Select Medical’s payout ratio is currently 29.07%.

Select Medical announced that its board has initiated a stock repurchase program on Thursday, February 19th that allows the company to repurchase $1.00 billion in shares. This repurchase authorization allows the health services provider to reacquire up to 49.5% of its shares through open market purchases. Shares repurchase programs are usually a sign that the company’s leadership believes its shares are undervalued.

Key Stories Impacting Select Medical

Here are the key news stories impacting Select Medical this week:

• Positive Sentiment: Board authorized a large share buyback — a $1.0 billion repurchase plan that could cover up to ~49.5% of outstanding shares; this signals management thinks the stock is undervalued and supports earnings per share. RTT News: Buyback
• Positive Sentiment: Board declared a quarterly cash dividend of $0.0625 per share (annualized yield ~1.7%), adding a steady return component for income-focused holders. PR Newswire: Q4 results & dividend
• Positive Sentiment: Top-line beat and operating profit rebound — Q4 revenue grew 6.4% to $1.40B (above estimates) and operating profit improved materially, showing service demand strength in key segments. QuiverQuant: Q4 results
• Neutral Sentiment: FY‑2026 guidance is roughly in line with consensus on revenue but EPS guidance (1.22–1.32) sits at the low end vs. consensus (~1.32), leaving upside limited unless margins improve. PR Newswire: Guidance
• Neutral Sentiment: Full earnings call transcript is available for details on expense drivers and segment trends — useful for investors deciding whether the EPS shortfall is temporary. Seeking Alpha: Earnings Call Transcript
• Negative Sentiment: EPS missed estimates — reported $0.16 vs. consensus ~$0.23, weighed by rising expenses and margin pressure; that miss is the primary near-term driver of the stock decline. Zacks: EPS miss
• Negative Sentiment: Weak cash flow and lower net income — operating cash fell sharply year-over-year and cash on hand declined, which raises near-term financial flexibility concerns despite the buyback plan. QuiverQuant: Cash flow & balance sheet

Analyst Ratings Changes

SEM has been the subject of several recent research reports. Wall Street Zen downgraded Select Medical from a “buy” rating to a “hold” rating in a report on Saturday. Weiss Ratings reaffirmed a “sell (d+)” rating on shares of Select Medical in a research report on Wednesday, January 21st. Benchmark reiterated a “buy” rating on shares of Select Medical in a report on Monday, October 27th. Finally, Mizuho set a $17.00 price target on Select Medical in a research report on Monday, November 3rd. Four equities research analysts have rated the stock with a Buy rating, one has given a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, Select Medical presently has a consensus rating of “Moderate Buy” and an average price target of $17.80.

Institutional Trading of Select Medical

Hedge funds and other institutional investors have recently made changes to their positions in the stock. Smartleaf Asset Management LLC boosted its stake in Select Medical by 37.8% during the 4th quarter. Smartleaf Asset Management LLC now owns 2,870 shares of the health services provider’s stock valued at $43,000 after acquiring an additional 788 shares during the last quarter. Advisors Asset Management Inc. raised its stake in shares of Select Medical by 13.2% in the 2nd quarter. Advisors Asset Management Inc. now owns 7,135 shares of the health services provider’s stock valued at $108,000 after purchasing an additional 834 shares in the last quarter. State of Alaska Department of Revenue lifted its position in shares of Select Medical by 1.5% during the fourth quarter. State of Alaska Department of Revenue now owns 63,370 shares of the health services provider’s stock worth $940,000 after purchasing an additional 935 shares during the last quarter. Wilmington Savings Fund Society FSB grew its stake in Select Medical by 20.9% in the third quarter. Wilmington Savings Fund Society FSB now owns 5,784 shares of the health services provider’s stock worth $74,000 after purchasing an additional 999 shares in the last quarter. Finally, Universal Beteiligungs und Servicegesellschaft mbH increased its holdings in Select Medical by 9.7% in the fourth quarter. Universal Beteiligungs und Servicegesellschaft mbH now owns 11,475 shares of the health services provider’s stock valued at $171,000 after buying an additional 1,014 shares during the last quarter. Institutional investors own 89.48% of the company’s stock.

Select Medical Price Performance

The company has a quick ratio of 1.09, a current ratio of 1.09 and a debt-to-equity ratio of 0.87. The company has a 50 day simple moving average of $15.31 and a 200-day simple moving average of $14.06. The stock has a market cap of $1.86 billion, a price-to-earnings ratio of 13.07, a PEG ratio of 0.56 and a beta of 1.25.

About Select Medical

Select Medical is a leading provider of specialized healthcare services in the United States, operating through two primary business segments: Hospital Division and Outpatient Rehabilitation Division. The Hospital Division offers long-term acute care (LTAC) hospitals and inpatient rehabilitation facilities (IRFs) that serve patients recovering from complex illnesses, trauma or surgery. The Outpatient Rehabilitation Division delivers physical, occupational and speech therapy services through a network of clinic locations and home-based care programs.

Headquartered in Mechanicsburg, Pennsylvania, Select Medical was founded in 1996 and has grown through strategic partnerships, joint ventures and acquisitions.