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Investing.com - RBC Capital has raised its price target on The Pennant Group (NASDAQ:PNTG) to $39.00 from $34.00 while maintaining an Outperform rating on the stock. Currently trading at $24.90, PNTG appears undervalued according to InvestingPro analysis, with the stock trading 25% below its Fair Value despite showing robust revenue growth of nearly 30% over the last twelve months.
The price target increase represents a target enterprise multiple of 11.4x RBC’s revised 2026 adjusted EBITDAR estimate for the company. For context, PNTG currently trades at an EV/EBITDA multiple of 23.5x with a trailing twelve-month EBITDA of $50.6 million.
RBC Capital analyst Ben Hendrix indicated that the AMED asset acquisition is "likely underappreciated by the market," suggesting this was a key factor in the firm’s decision to raise its outlook.
The updated price target follows RBC’s Quick Take note published on November 5, in which the firm provided initial commentary on The Pennant Group’s third-quarter 2025 results.
The analyst has now updated the financial model for The Pennant Group, incorporating additional analysis of the company’s recent performance and the impact of the AMED acquisition.
In other recent news, Pennant Group announced its Q3 2025 earnings, which showed a significant shortfall in earnings per share (EPS). The company reported an EPS of $0.17, which was below the expected $0.30, marking a negative surprise of 43.33%. Despite this miss, Pennant Group’s revenue surpassed expectations, coming in at $229 million compared to the forecasted $222.72 million. This revenue beat did not prevent a decline in the company’s stock price, although stock price movements are not the focus here. These recent developments highlight the mixed financial performance of Pennant Group, with strong revenue growth but disappointing earnings per share.
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