Extendicare (EXE) ran 11% on its Q1 print, which crushed estimates on the back of near-35% growth in home health care - partly due to its $570M CBI deal…
… but mostly driven by persistently high organic growth, the duration of which has surprised management…
I’ll candidly say that we expected the volume growth to moderate long before now. It has been a surprise to us, you know, to the degree to which it has, you know, continued to increase, and we just don’t know when it will slow down.
… and helped the margin profile, given the segment runs at better unit economics than the long-term care business.
While management expects a return to high single-digit growth is on the horizon, investors are looking further out - pricing EXE at its peak forward EBITDA multiple.
