SEM Should I Buy
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Select Medical Holdings Corp (SEM) is not a strong buy for a beginner, long-term investor at this moment. The company's recent financial performance shows significant declines in profitability metrics, and technical indicators suggest a bearish trend. While the company is expanding its rehab bed capacity and maintaining dividends, these positive developments are overshadowed by weak earnings and guidance. The options data indicates a bearish sentiment, and there are no significant trading signals or political trades to support a buy decision.
The MACD is negative and expanding (-0.154), indicating bearish momentum. The RSI is neutral at 27.609, but close to oversold territory. Moving averages are converging, suggesting indecision in price action. The stock is trading near its support level of 14.783, with resistance at 16.353. Overall, the technical indicators lean bearish.
It has maintained its quarterly dividend of $0.0625 per share, ensuring stable shareholder returns.
The company reported a 10% drop in adjusted EBITDA due to rising costs. Q4 2025 financial results showed a significant decline in net income (-307.20% YoY) and EPS (-328.57% YoY). Analysts have lowered the price target from $20 to $19, citing weaker-than-expected guidance for 2026.
In Q4 2025, revenue remained flat at $1.4 billion (0.00% YoY growth). However, net income dropped significantly to $19.55 million (-307.20% YoY), and EPS fell to $0.16 (-328.57% YoY). Gross margin also declined to 7.85 (-17.02% YoY), indicating rising costs and lower profitability.
RBC Capital lowered the price target to $19 from $20 but maintained an Outperform rating. Analysts are cautious due to weaker guidance for 2026 and a Q4 adjusted EBITDA miss, though they are encouraged by management's outlook on CIRH segment costs.
