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Select Medical Holdings Corporation – General Medical and Surgical Hospitals
Select Medical is one of the largest operators of critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States based on the number of facilities. Our reportable segments include the critical illness recovery hospital segment, the rehabilitation hospital segment, the outpatient rehabilitation segment, and the Concentra segment. As of March 31, 2019, Select Medical operated 97 critical illness recovery hospitals in 28 states, 27 rehabilitation hospitals in 11 states, and 1,684 outpatient rehabilitation clinics in 37 states and the District of Columbia. Select Medical's joint venture subsidiary Concentra operated 525 occupational health centers in 41 states. Concentra also provides contract services at employer worksites and Department of Veterans Affairs community-based outpatient clinics. At March 31, 2019, Select Medical had operations in 47 states and the District of Columbia.
Analysis Results
Intrinsic Value $172.45
Latest Price $27.11
Relative Value 84% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 15.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 15.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 0.642 0.603
2024 0.742 0.655
2025 0.858 0.712
2026 0.992 0.774
2027 1.15 0.841
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 26.6 billion. This corresponds to a present value of 18.3 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 3.59 billion. Adding in the terminal value gives a total present value of 21.9 billion.

There are presently 127.0 million outstanding shares, so the intrinsic value per share is 172.45.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,271,313,000
Current Cash 97,906,000
Current Liabilities 1,155,151,000
Current Debt 76,312,000
Non-Cash Working Capital (NCWC) 94,568,000
Change in NCWC 242,591,000
EBIT 400,924,000
Tax Provision 62,553,000
Depreciation and Amortization 205,825,000
Capital Expenditure -190,372,000
Unlevered Free Cash Flow 562,724,638
Current Assets 1,139,439,000
Current Cash 74,310,000
Current Liabilities 1,273,077,000
Current Debt 59,925,000
Non-Cash Working Capital (NCWC) -148,023,000
Change in NCWC 260,783,000
EBIT 614,174,000
Tax Provision 129,773,000
Depreciation and Amortization 202,645,000
Capital Expenditure -180,537,000
Unlevered Free Cash Flow 770,496,129
Current Assets 1,594,000,000
Current Cash 577,061,000
Current Liabilities 1,438,366,000
Current Debt 12,621,000
Non-Cash Working Capital (NCWC) -408,806,000
Change in NCWC -396,803,000
EBIT 507,085,000
Tax Provision 111,867,000
Depreciation and Amortization 205,659,000
Capital Expenditure -146,440,000
Unlevered Free Cash Flow 45,230,610
Current Assets 1,212,992,000
Current Cash 335,882,000
Current Liabilities 914,280,000
Current Debt 25,167,000
Non-Cash Working Capital (NCWC) -12,003,000
Change in NCWC -193,111,000
EBIT 496,870,000
Tax Provision 63,718,000
Depreciation and Amortization 212,576,000
Capital Expenditure -157,126,000
Unlevered Free Cash Flow 239,625,686
Current Assets 992,524,000
Current Cash 175,178,000
Current Liabilities 705,186,000
Current Debt 68,948,000
Non-Cash Working Capital (NCWC) 181,108,000
Change in NCWC -63,416,000
EBIT 439,184,000
Tax Provision 58,610,000
Depreciation and Amortization 201,655,000
Capital Expenditure -167,281,000
Unlevered Free Cash Flow 300,864,327
Current Assets 920,826,000
Current Cash 122,549,000
Current Liabilities 605,403,000
Current Debt 51,650,000
Non-Cash Working Capital (NCWC) 244,524,000
Change in NCWC 54,102,000
EBIT 376,932,000
Tax Provision -18,184,000
Depreciation and Amortization 160,011,000
Capital Expenditure -233,243,000
Unlevered Free Cash Flow 357,802,000
Current Assets 808,068,000
Current Cash 99,029,000
Current Liabilities 571,635,000
Current Debt 53,018,000
Non-Cash Working Capital (NCWC) 190,422,000
Change in NCWC -68,793,000
EBIT 319,790,000
Tax Provision 55,464,000
Depreciation and Amortization 145,311,000
Capital Expenditure -161,633,000
Unlevered Free Cash Flow 136,537,225
Current Assets 749,154,000
Current Cash 14,435,000
Current Liabilities 737,689,000
Current Debt 262,185,000
Non-Cash Working Capital (NCWC) 259,215,000
Change in NCWC 96,729,000
EBIT 291,601,000
Tax Provision 72,436,000
Depreciation and Amortization 104,981,000
Capital Expenditure -182,642,000
Unlevered Free Cash Flow 209,329,426
Current Assets 527,644,000
Current Cash 3,354,000
Current Liabilities 394,424,000
Current Debt 32,620,000
Non-Cash Working Capital (NCWC) 162,486,000
Change in NCWC 53,856,000
EBIT 291,520,000
Tax Provision 75,622,000
Depreciation and Amortization 68,354,000
Capital Expenditure -95,246,000
Unlevered Free Cash Flow 210,311,036
Current Assets 454,402,000
Current Cash 4,319,000
Current Liabilities 371,524,000
Current Debt 30,071,000
Non-Cash Working Capital (NCWC) 108,630,000
Change in NCWC 54,092,000
EBIT 303,912,000
Tax Provision 74,792,000
Depreciation and Amortization 64,392,000
Capital Expenditure -73,660,000
Unlevered Free Cash Flow 233,821,584
Current Assets 453,663,000
Current Cash 40,144,000
Current Liabilities 388,463,000
Current Debt 29,482,000
Non-Cash Working Capital (NCWC) 54,538,000
Change in NCWC -60,348,000
EBIT 344,564,000
Tax Provision 89,657,000
Depreciation and Amortization 63,311,000
Capital Expenditure -68,185,000
Unlevered Free Cash Flow 152,499,156

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