PACS Group delivers excellent cash conversion of 124% free cash flow relative to net income and a return on equity of 27%, with 18% analyst upside, but carries high leverage at debt-to-equity of 3.4 and two consecutive earnings misses that challenge the growth thesis heading into the next earnings cycle.
Thesis pillars
- Strong Fcf Conversion And Roe→Stable
- Strong Revenue Growth Profile→Stable
- High Leverage Financial Risk↑Improving
- +1 more pillar — see the Why tab for full reasoning
PACS Group, Inc. (PACS) Stock Analysis
Healthcare · Medical Care Facilities
Hold if already holding. Not a fresh buy at $42.61, but acceptable to hold if already in. Reasons: V7 low-quality RISK_OFF penalty: -0.5 (Q=4.8); Leverage penalty (D/E 3.1): -1.5.
PACS Group operates 321 post-acute care and skilled nursing facilities across 17 states, serving over 31,700 patients daily. The company generated $5.3 billion in revenue in 2025, with Medicare and Medicaid together representing 74.2% of routine revenue.
Hold if already holding. Not a fresh buy at $42.61, but acceptable to hold if already in. Reasons: V7 low-quality RISK_OFF penalty: -0.5 (Q=4.8); Leverage penalty (D/E 3.1): -1.5. Chart setup: No clear chart pattern; technical signals are mixed. Under M&A bid. Hold for deal completion or sell if spread < 3%. Score 5.8/10, moderate confidence.
Passes 5/8 gates (favorable risk/reward ratio, news boost analyst 0.60, earnings proximity 66d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum. Suitability: moderate.
About PACS Group, Inc.
About PACS Group, Inc.
PACS Group operated 321 post-acute care facilities across 17 states at December 31, 2025, generating $5.3 billion in total revenue for the year — a compound annual growth rate of 30.4% over three years. The portfolio served over 31,700 patients daily, with Mature facilities (150 of 321) averaging a 4.4 QM Star rating and 95% occupancy, compared to the 3.5 Star and 79% occupancy industry averages.
PACS Group earns revenue primarily from Medicare and Medicaid reimbursement, which together accounted for 74.2% of routine revenue in 2025 (33.7% Medicare, 40.5% Medicaid). The company acquires underperforming long-term custodial care SNFs and converts them into higher-acuity, short-term transitional care facilities through an up to three-year post-acquisition transition period. In 2025, Mature facilities generated $2.9 billion in skilled nursing services revenue; Ramping and New facilities contributed $1.1 billion and $1.2 billion, respectively. The portfolio leans heavily on leased properties — 268 of 321 facilities as of December 31, 2025 — with the majority of leased facilities in California; the weighted average annual lease escalator of 2% and average remaining lease term of approximately 13 years provide operational durability. PACS Group competes with other SNF operators for hospital discharge referrals, where its 4.1-Star average portfolio rating versus the 3.5 Star industry average supports admissions mix.
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Medicare and Medicaid are set by CMS rate-setting cycles, not negotiated commercially, making them less predictable than private insurance. PACS Group's 10-K identifies changes in patient acuity mix and payor mix as top risks to revenue and financial condition. Any CMS rate reduction for SNF services, or a policy shift favoring home health over facility-based post-acute care, could weigh on the company's blended reimbursement rate. In April 2026, the company appointed Carey Hendrickson as CFO, bringing new financial leadership as the company navigates payer concentration risk.
See also: Healthcare · Medical Care Facilities
From PACS Group, Inc.'s most recent 10-K filing, extracted June 11, 2026.
Recent developments
updated 2026-09-04Recent Developments — PACS Group, Inc.
Latest news
- NEWS Pacs Group Inc (PACS) Earnings Forecast: Future EPS & Revenue Growth Estimates - TradingKey — TradingKey neutral
- NEWS Pacs Group Inc (PACS) Earnings Forecast: Future EPS & Revenue Growth Estimates - tradingkey.com — tradingkey.com neutral
- NEWS PACS : Intends to Release First Quarter 2026 Earnings on Monday, May 11, 2026, and Host a Call to Discuss Financial Resu — marketscreener.com neutral
- NEWS PACS Group Q2 Results: Earnings Release and Call Scheduled - scanx.trade — scanx.trade neutral
- NEWS PACS Group Schedules Second Quarter 2026 Earnings Release and Conference Call - Business Wire — Business Wire neutral
Generated 2026-09-04T19:02:09Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMCustomerMedicare34%10-K Item 1: 'Medicare and Medicaid...accounted for 33.7% and 40.5% of our routine revenue for the year ended December 31, 2025'
- MEDIUMCustomerMedicaid41%10-K Item 1: 'Medicare and Medicaid...accounted for 33.7% and 40.5% of our routine revenue for the year ended December 31, 2025'
- MEDIUMGeographicCalifornia10-K Item 1: 'The majority of these leased facilities are in California'
Material Events(8-K, last 90d)
- 2026-04-27Item 5.02MEDIUMCarey Hendrickson appointed CFO effective April 27, 2026, replacing Mark Hancock as Interim CFO. Hancock continues as Executive Vice Chairman and Class II director; plans to retire as executive officer June 30, 2026 while remaining on board.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
1 floor-breaker
Momentum below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $42.61, but acceptable to hold if already in. Reasons: V7 low-quality RISK_OFF penalty: -0.5 (Q=4.8); Leverage penalty (D/E 3.1): -1.5. Chart setup: No clear chart pattern; technical signals are mixed. Under M&A bid. Hold for deal completion or sell if spread < 3%. Target $51.50 (+20.9%), stop $40.51 (−5.2%), A.R:R 3.0:1. Score 5.8/10, moderate confidence.
Take-profit target: $51.50 (+20.9% upside). Target $51.50 (+20.9%), stop $40.51 (−5.2%), A.R:R 3.0:1. Stop-loss: $40.51.
V7 low-quality RISK_OFF penalty: -0.5 (Q=4.8); Leverage penalty (D/E 3.1): -1.5; Negative momentum.
PACS Group, Inc. trades at a P/E of 25.2 (forward 15.9). TrendMatrix value score: 6.3/10. Verdict: Hold.
12 analysts cover PACS with a consensus score of 4.3/5. Average price target: $59.
What does PACS Group, Inc. do?PACS Group operates 321 post-acute care and skilled nursing facilities across 17 states, serving over 31,700 patients...
PACS Group operates 321 post-acute care and skilled nursing facilities across 17 states, serving over 31,700 patients daily. The company generated $5.3 billion in revenue in 2025, with Medicare and Medicaid together representing 74.2% of routine revenue.