Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at U.S. Physical Therapy (NYSE: USPH) and its peers.

The outpatient and specialty care industry delivers targeted medical services in non-hospital settings that are often cost-effective compared to inpatient alternatives. This means that they are more desired as rising healthcare costs and ways to combat them become more and more top-of-mind. Outpatient and specialty care providers boast revenue streams that are stable due to the recurring nature of treatment for chronic conditions and long-term patient relationships. However, their reliance on government reimbursement programs like Medicare means stroke-of-the-pen risk. Additionally, scaling a network of facilities can be capital-intensive with uneven return profiles amid competition from integrated healthcare systems. Looking ahead, the industry is positioned to grow as demand for outpatient services expands, driven by aging populations, a rising prevalence of chronic diseases, and a shift toward value-based care models. Tailwinds include advancements in medical technology that support more complex procedures in outpatient settings and the increasing focus on preventive care, which can be aided by data and AI. However, headwinds such as reimbursement rate cuts, labor shortages, and the financial strain of digitization may temper growth.

The 6 outpatient & specialty care stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 5.9% above.

Luckily, outpatient & specialty care stocks have performed well with share prices up 72% on average since the latest earnings results.

Weakest Q1: U.S. Physical Therapy (NYSE: USPH)

With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE: USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.

U.S. Physical Therapy reported revenues of $198.3 million, up 7.9% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates.

Chris Reading, Chairman and Chief Executive Officer commented, “I want to begin by thanking our partners and clinical teams for their tremendous care and their continued efforts on behalf of our patients and across several important initiatives this year. These include a partial virtualization of our front desk; company-wide rollout of ambient-listening technology to improve documentation efficiency and allow for more patient-centric interaction; remote therapeutic monitoring for our traditional Medicare patients to facilitate greater home program adherence positively impacting care and outcomes; and targeted cash-based program expansion across our top partnerships impacting care and outcomes as well as overall margin. These initiatives, along with our very important hospital alliance focus, will bear fruit particularly in the second half of the year.”

U.S. Physical Therapy delivered the weakest performance against analyst estimates of the whole group. The market seems disappointed with the results as the stock is down 1.5% since reporting and currently trades at $72.56.

Read our full report on U.S. Physical Therapy here, it’s free.

Best Q1: agilon health (NYSE: AGL)

Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE: AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.

agilon health reported revenues of $1.42 billion, down 7.3% year on year, outperforming analysts’ expectations by 3.2%. The business had a stunning quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

agilon health delivered the highest guidance raise and highest full-year guidance raise among its peers. On a dimmer note, the company lost 85,000 customers and ended up with a total of 426,000. The market seems happy with the results as the stock is up 312% since reporting. It currently trades at $114.76.

Is now the time to buy agilon health? Access our full analysis of the earnings results here, it’s free.

Encompass Health (NYSE: EHC)

With a network of 161 specialized facilities across 37 states and Puerto Rico, Encompass Health (NYSE: EHC) operates inpatient rehabilitation hospitals that help patients recover from strokes, hip fractures, and other debilitating conditions.

Encompass Health reported revenues of $1.59 billion, up 9% year on year, exceeding analysts’ expectations by 1.2%. It was a satisfactory quarter as it also posted a beat of analysts’ EPS estimates.

Interestingly, the stock is up 10.3% since the results and currently trades at $110.30.

Read our full analysis of Encompass Health’s results here.

Surgery Partners (NASDAQ: SGRY)

With more than 180 locations across 33 states serving as alternatives to traditional hospital settings, Surgery Partners (NASDAQ: SGRY) operates a national network of outpatient surgical facilities including ambulatory surgery centers and short-stay surgical hospitals.

Surgery Partners reported revenues of $810.9 million, up 4.5% year on year. This number surpassed analysts’ expectations by 1.6%. Overall, it was a strong quarter as it also logged a beat of analysts’ EPS estimates.

Surgery Partners had the weakest full-year guidance update among its peers. The stock is up 15.4% since reporting and currently trades at $16.39.

Read our full, actionable report on Surgery Partners here, it’s free.

DaVita (NYSE: DVA)

With over 2,600 dialysis centers across the United States and a presence in 13 countries, DaVita (NYSE: DVA) operates a network of dialysis centers providing treatment and care for patients with chronic kidney disease and end-stage kidney disease.

DaVita reported revenues of $3.42 billion, up 6% year on year. This result beat analysts’ expectations by 2.1%. Overall, it was a very strong quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.

The stock is up 50.2% since reporting and currently trades at $235.84.

Read our full, actionable report on DaVita here, it’s free.

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