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The Quiet Healthcare Stock Turning Home Visits into High Returns
Noah Zelvis
July 03, 2025
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The Pennant Group, Inc.
03 July – Pre‑market
Ticker: PNTG | Sector: Healthcare | Market Cap: ~ $906.2M
30‑Second Take
Why now? The Pennant Group is quietly becoming a key player in the home-healthcare market.
It’s expanding its footprint with strategic acquisitions across numerous U.S. states.
On July 1 it announced its latest acquisition; that of home health agency GrandCare Health Services.
GrandCare’s existing services in Los Angeles, Orange, Riverside and San Diego counties will be folded into The Pennant Group’s operations, significantly increasing PNTG’s presence in the lucrative (and strategically important) California region.
This addition allows for the vertical integration of home health services and further closes the loop between The Pennant Group’s existing offerings.
It’s worth noting that The Pennant Group’s previous acquisitions have all performed well.
Its most recent earnings report set company records. Revenue is up 33.7% year-on-year while net income has soared 58.5% in the same timeframe.
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Trade Setup
Time frame: Swing to medium-term
Edge type: Momentum breakout + revenue expansion
Snapshot Table
Metric | Value | Current Stance |
|---|---|---|
Price | $25.86 | Below average |
52‑week range | $21.18 - $37.13 | Below average |
Short interest | 1.89% | Below average |
Next catalyst | Q2 earnings, expected early August |
Chart
5-Day Synopsis: The last five sessions have been characterized by a backward slide, with the stock drifting from a five-day high of $30.21 to its current price of $25.45.
The decline on July 01 can be characterized as a ‘gap down’ shift.
Technical analysis reveals a spike in volume, with some analysts classifying the stock as overbought before the dip.
Short-term profit taking following the acquisition announcement and previous strong Q1 earnings could also have helped to send prices lower.
This correction creates a buy opportunity for investors seeking an under-the-radar investment with long-term potential.
Bull Case
Core thesis: The Pennant Group offers healthcare services through 103 home health and hospice agencies and 51 senior living communities.
It operates across 14 U.S. states with services including in-home care, assisted living care and memory care.
It is quickly building momentum as a leading name in the home care, hospice, and senior living industries.
Catalysts: The acquisition of GrandCare is enormously significant for PNTG.
That’s because it gives the company a foothold in some of California’s most prosperous regions, with aging, underserved populations.
This vertical integration also brings The Pennant Group closer to offering a full-circle homecare solution spanning in-home care and assisted living through to long-term and hospice services.
This could give The Pennant Group’s growth trajectory a major boost.
Valuation upside: Analysts are broadly in agreement on PNTG’s potential, with the valuation range running from a low of $31.00 to a high of $37.00.
Technical tailwind: Short-term fluctuations are the norm for PNTG stock.
Structural demand, a scalable model and a positive full-year outlook provide a strong underpinning for a solid recovery, suggesting the current decline has its roots in short-term selling pressure and rally-fueled profit taking.
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Bear Case
Key risk: PNTG was removed from the Russell 2000 Dynamic Index on June 01 meaning passive fund demand has weakened.
This has increased volatility, with PNTG previously outperforming its peers in the hospice care space.
While its acquisition strategy has powered rapid growth, its decentralized model adds complexity, can result in inconsistent performance, and allows for operational inefficiencies to creep in.
Macro/sector headwinds: The healthcare sector faces two key headwinds.
The first is a lack of trained staff, with many healthcare businesses forced to employ expensive agency staff to fill gaps in their caregiver personnel rosters.
Trade tariffs also pose a threat for the second, with the cost of medical supplies arriving from overseas increasing sharply.
This squeezes margins and can lead to supply chain challenges.
Competitive threat: Many providers are switching to integrated care models as the health system navigates changing consumer demand.
Rivals like Encompass Health and LHC Group have larger pools of capital.
Several hospitals and healthcare systems are also moving into the home care space, with notable names including Cleveland Clinic Home Care and Ascension.
This increased competition could limit The Pennant Group’s ability to expand its own client base.
Crowded-trade concern: At current price levels, PNTG stock is down 3.17% on the year-to-date. If Q2 results fall short of expectations, a sales flurry could follow.
Quick Checklist
✅ Thesis still valid after today’s close
✅ Volume confirms move above key levels
✅ Catalyst date double-checked (July 02, 2025)
Deep‑Dive Links
That’s all for today’s Everyday Alpha. We’ll have a new pick for you every morning before the market opens, so stay tuned!
Best Regards,
—Noah Zelvis
Everyday Alpha