The Pennant Group (NASDAQ: PNTG) is executing on acquisitions as the company’s senior living segment is on the “ascent,” according to CEO Brent Guerisoli.
Earlier this month, Pennant closed on three senior living transactions, acquiring one property in Idaho and two in Texas in triple-net lease agreements with an option to purchase the property in the future. Among the three transactions, a total of 188 new senior living units were added to the company’s portfolio.
COO John Gochnour described the buildings as “attractive, Class A buildings in growing population centers” with overlap from the company’s existing home health and hospice services to “build tenants and incomes of care.”
“That’s what gives us a lot of optimism in both segments, that from a same store standpoint, we can continue to push growth,” Gochnour said.
This comes as the Eagle, Idaho-based company is focused on “quality of revenue” as it relates to room and board and level of care, Guerisoli said.
In the fourth quarter, Pennant entered into a triple net lease structure for three senior living communities in the Green Bay, Wisconsin area that added 125 units to the company’s senior living portfolio of over 57 communities.
“These buildings have performed well out of the gate and are well positioned to be accretive to our short and long term Senior Living results,” Guerisoli said.
Approximately 13% of the company’s assisted living properties receive some form of federal assistance from Medicaid, and leaders reacted to potential impacts the senior living industry could feel if cuts were made by the administration of President Donald Trump to the Centers for Medicare and Medicaid Services (CMS) budget.
“These are all programs that are designed to serve the communities that are so important to our nation’s future, that are vulnerable and that need a place to stay in a low cost setting,” Gochnour said. “We’re optimistic that as they look at places to cut, they’re going to identify the services we provide…represent a lower expenditure of Medicaid dollars and offer opportunities to actually save money.”
Pennant’s top leader also touted a leadership development program that launched in the fourth quarter adding 66 leaders to the company’s CEO-in-training program and launched a clinical leadership training program with 40 participants.
“We were not only successful in recruiting and developing new leaders, but also in the continued development of existing local leaders,” Guerisoli said.
In 2024, Pennant reported $175.8 million in senior living segment revenue, representing an increase of $25.3 million (16.8%) compared to 2023. In the fourth quarter of 2024, the company reported senior living revenue of $46.9 million, up 20% from 4Q23.
Pennant’s adjusted fourth quarter earnings before interest, taxes, depreciation, amortization and rent/restructuring (EBITDAR) came in approximately 1% below analyst projections, according to investment bank Stephens.
Occupancy reported in the fourth quarter of 78.6% across Pennant’s senior living communities also missed analyst expectations by 40 basis points, according to investment bank Stephens. EBITDA margins for the senior living segment in the fourth quarter were 28.7%, slightly below the projection by Stephens of 30.2% estimate.
Pennant stock finished at $22.77, down almost 11% on Friday afternoon.
The post Pennant Group Eyes More Senior Living Growth in 2025 After 3 Acquisitions appeared first on Senior Housing News.
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