Pennant Group expands credit facility by $100 million

EAGLE, Idaho - Pennant Group, Inc. (NASDAQ:PNTG) has added a $100 million term loan to its existing credit facility, bringing the total to $350 million, the healthcare services provider announced Wednesday. The company, with a market capitalization of approximately $873 million, currently carries total debt of about $320 million according to InvestingPro data.

The expanded borrowing capacity is supported by Pennant's existing lending consortium led by Truist Securities. The incremental loan maintains the same interest rate and maturity date as the existing facility.

Brent Guerisoli, Pennant's Chief Executive Officer, said the expansion "strengthens our balance sheet and gives us additional capacity to fund future growth," while emphasizing the company would remain "disciplined in our use of the credit facility." This disciplined approach appears warranted as InvestingPro analysis indicates the stock is currently undervalued compared to its Fair Value estimate, despite trading at a relatively high P/E ratio of 32.9.

According to Chief Financial Officer Lynette Walbom, proceeds from the incremental term loan will be used to refinance a portion of the outstanding revolving loans under the credit facility. Walbom noted that the additional capacity, combined with the company's "strong cash flow and prudent leverage ratios," provides flexibility for strategic opportunities. InvestingPro data confirms the company has been profitable over the last twelve months, with diluted earnings per share of $0.77 and revenue growth of 30.6%.

Pennant Group operates 141 home health and hospice agencies and 61 senior living communities across 13 states, including Arizona, California, Colorado, Idaho, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming.

Each business within the Pennant Group operates as a separate, independent subsidiary with its own management, employees, and assets, according to the company's press release statement.

In other recent news, Pennant Group Inc. reported its second-quarter earnings for 2025, revealing a revenue increase to $219.5 million, surpassing the projected $210.59 million. The earnings per share were in line with expectations at $0.27. Additionally, Pennant Group completed a significant acquisition, purchasing home health, hospice, and personal care operations from UnitedHealth Group for $146.5 million. This acquisition includes 54 locations, mainly in Tennessee, and is part of an antitrust settlement involving UnitedHealth and Amedisys Inc.

RBC Capital raised its price target for Pennant Group to $34 from $33, maintaining an Outperform rating, following the company's quarterly results. Meanwhile, Jefferies initiated coverage on Pennant Group with a Buy rating and a $30 price target, expressing optimism about the home health sector's potential for market share gains. Truist Securities reiterated a Hold rating with a $28 price target, emphasizing Pennant Group's favorable market position and recent merger and acquisition activities. These developments highlight the company's strategic moves and financial performance in the current market environment.

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