Select Medical Holdings Corporation Common Stock (SEM)

FairStock Score: 68/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Graham-and-Buffett-style investor, I look first for durable earning power and a margin of safety. Select Medical operates critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehab clinics—needed services, but the business is capital-intensive and labor-heavy. In the latest reported quarter, fiscal Q1 2026, revenue was $1.4 billion and net income $44.0 million, a 3.10% margin. That is a thin cushion. FairStock's calculated return on equity is 9.81%, but return on capital employed is only 3.43%, which suggests the enterprise does not earn much above its cost of capital. Debt is high: debt-to-equity is 1.42, and the Altman Z-Score of 0.83 is in the distress zone, so balance-sheet risk is real. On the positive side, trailing free cash flow is $152.0 million, a 7.5% FCF yield on the $2.0 billion market cap. At the 2026-06-30 close of $16.51, FairStock's calculations show a P/E of 15.43, P/B of 1.17, and EV/EBITDA of 9.64. The Graham Number is $18.46, giving about a 10.56% margin of safety. The Piotroski F-Score is 6/9, decent but not pristine. The data also show extreme revenue and profit growth, but the Lynch category is unavailable because there are only 0 years of filed annual results—so I would not treat that growth as proven. This looks like a moderately priced, leveraged healthcare operator, not a wide-moat bargain. I'd want sustained free cash flow, debt reduction, and a longer filing history before calling it compelling.

In plain English: Select Medical runs critical illness recovery hospitals, rehabilitation hospitals, and outpatient rehab clinics in the U.S. In the latest reported quarter, fiscal Q1 2026, it earned $44.0 million on $1.4 billion of revenue, which is a thin profit margin. The stock at $16.51 looks roughly fair to mildly cheap compared with its earnings and net assets, but the company uses a lot of debt and its profit record is not well proven.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-06-30 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer