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

Select Medical Holdings Corporation (NYSE:SEM)’s stock price dropped 6.2% on Friday following a weaker than expected earnings announcement. The company traded as low as $14.53 and last traded at $15.0910. Approximately 298,045 shares were traded during trading, a decline of 56% from the average daily volume of 682,209 shares. The stock had previously closed at $16.08.

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

Select Medical Announces Dividend

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

Select Medical announced that its Board of Directors has approved a stock repurchase plan on Thursday, February 19th that permits the company to repurchase $1.00 billion in outstanding shares. This repurchase authorization permits the health services provider to reacquire up to 49.5% of its stock through open market purchases. Stock repurchase plans are typically a sign that the company’s management believes its shares are undervalued.

Key Select Medical News

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

A number of equities analysts recently issued reports on SEM shares. Weiss Ratings raised Select Medical from a “sell (d+)” rating to a “hold (c-)” rating in a report on Friday. Wall Street Zen lowered Select Medical from a “buy” rating to a “hold” rating in a report on Saturday. Benchmark reaffirmed a “buy” rating on shares of Select Medical in a report on Monday, October 27th. Finally, Mizuho set a $17.00 target price on shares of Select Medical in a research note on Monday, November 3rd. Four research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, the company has an average rating of “Moderate Buy” and a consensus price target of $17.80.

Institutional Inflows and Outflows

A number of hedge funds have recently bought and sold shares of SEM. Mitsubishi UFJ Trust & Banking Corp lifted its stake in Select Medical by 889.7% during the third quarter. Mitsubishi UFJ Trust & Banking Corp now owns 64,094 shares of the health services provider’s stock valued at $823,000 after purchasing an additional 57,618 shares during the last quarter. Y Intercept Hong Kong Ltd bought a new position in shares of Select Medical in the second quarter valued at $1,319,000. Public Sector Pension Investment Board lifted its position in shares of Select Medical by 21.3% during the 3rd quarter. Public Sector Pension Investment Board now owns 430,472 shares of the health services provider’s stock valued at $5,527,000 after acquiring an additional 75,530 shares during the last quarter. Econ Financial Services Corp bought a new stake in shares of Select Medical during the 2nd quarter worth $822,000. Finally, Segall Bryant & Hamill LLC grew its holdings in shares of Select Medical by 38.3% in the 2nd quarter. Segall Bryant & Hamill LLC now owns 139,435 shares of the health services provider’s stock worth $2,117,000 after acquiring an additional 38,607 shares during the last quarter. 89.48% of the stock is owned by institutional investors and hedge funds.

Select Medical Stock Down 6.5%

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 market capitalization of $1.86 billion, a price-to-earnings ratio of 13.07, a price-to-earnings-growth ratio of 0.53 and a beta of 1.25. The business has a 50-day moving average price of $15.31 and a 200-day moving average price of $14.08.

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.