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MECHANICSBURG, Pa. - Select Medical Corporation (NYSE: SEM), a healthcare provider with annual revenue of $5.2 billion and strong financial health according to InvestingPro analysis, announced today it has signed an agreement with Ballad Health to jointly operate Select Specialty Hospital – Tri-Cities, a critical illness recovery hospital in Kingsport, Tennessee.
Under the agreement, Select Medical will serve as the majority owner and managing partner of the 46-bed facility, which will operate as a hospital-in-hospital within Ballad Health’s Indian Path Community Hospital. The facility is currently owned and operated by Select Medical at Ballad Health’s Bristol Regional Medical Center and will relocate following regulatory approval. According to InvestingPro data, the company shows promising growth potential with net income expected to increase this year.
The critical illness recovery hospital, licensed as long-term acute care, has served the region for more than 25 years.
"This partnership with Ballad Health and the new, expanded location will provide the opportunity to help even more critically ill patients," said Tom Mullin, president of Select Medical.
Marvin Eichorn, executive vice president at Ballad Health, noted the relocation aims to expand access to critical illness recovery services in a "patient-centered and operationally efficient" manner.
Select Medical currently operates six additional critical illness recovery hospitals throughout Tennessee, located in Jackson, Knoxville, Memphis, Nashville and Powell.
The announcement comes as both organizations seek to enhance specialized post-ICU care services in the Appalachian Highlands region. With the stock currently trading near its 52-week low, InvestingPro analysis suggests Select Medical may be undervalued, offering potential opportunities for investors interested in the healthcare sector. The information is based on a press release statement from the companies and InvestingPro data.
In other recent news, Select Medical Holdings reported its first-quarter earnings for 2025, revealing an earnings per share (EPS) of $0.75, which significantly surpassed analyst expectations of $0.37. However, the company’s revenue fell short, coming in at $1.35 billion compared to the forecasted $1.39 billion. Benchmark analysts, while maintaining a Buy rating, adjusted their price target for Select Medical to $21, citing a 2% decrease in the fiscal year 2025 adjusted EBITDA forecast due to challenges in the company’s Critical Illness Recovery Hospitals segment. UBS also revised its price target for Select Medical, reducing it to $15 from $19, while maintaining a Neutral rating, highlighting regulatory challenges affecting the Long-Term Acute Care Hospital segment. Mizuho Securities maintained an Outperform rating but lowered its price target to $21 from $25, noting that the challenges faced due to the severe flu season were temporary. Despite these adjustments, the company remains optimistic, with Benchmark projecting a 10% growth for Select Medical in fiscal year 2026. Select Medical continues to engage with regulatory bodies to address the high-cost outlier threshold and other regulatory challenges impacting its operations.
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