Outpatient & Specialty Care Equities Q4 Overview: Comparing U.S. Physical Therapy (NYSE:USPH) With Its Competitors

Q4 Review: Outpatient & Specialty Care Sector Highlights

As the fourth quarter earnings period wraps up, it's an opportune moment to review which companies in the outpatient and specialty care sector, such as U.S. Physical Therapy (NYSE:USPH), stood out—both positively and negatively.

Industry Overview

Outpatient and specialty care providers deliver focused medical services outside of hospitals, often at a lower cost than inpatient care. This makes them increasingly attractive as healthcare expenses rise and cost-saving strategies become more important. Their business models benefit from steady revenue streams, thanks to ongoing treatments for chronic illnesses and long-term patient engagement. However, these companies face risks tied to government reimbursement programs like Medicare, which can change abruptly. Expanding facility networks also demands significant investment and can yield inconsistent returns, especially with competition from large, integrated healthcare systems.

Looking forward, the sector is set for continued expansion, fueled by an aging population, a higher incidence of chronic diseases, and a shift toward value-based care. Technological advancements are enabling more complex procedures in outpatient settings, and the growing emphasis on preventive care—supported by data and AI—offers additional momentum. Still, challenges remain, including potential cuts to reimbursement rates, workforce shortages, and the financial burden of digital transformation.

Q4 Performance Snapshot

• The seven outpatient and specialty care companies tracked posted mixed results for Q4.
• Collectively, their revenues surpassed analyst forecasts by 2.5%, while guidance for the next quarter was largely in line with expectations.
• On average, share prices for these companies have risen 8.5% since their latest earnings announcements.

Company Spotlights

U.S. Physical Therapy (NYSE:USPH)

Operating 671 clinics in 42 states, U.S. Physical Therapy manages a broad network of outpatient physical therapy centers and offers workplace injury prevention services nationwide.

For Q4, the company reported $202.7 million in revenue, marking a 12.3% increase year-over-year and beating analyst projections by 1.7%. While earnings per share matched expectations, the revenue outperformance made for a solid quarter overall.

CEO Chris Reading commented, “Our team capped off a strong year, achieving over 16% revenue growth, more than 20% gross profit growth, and improvements in both margins and net rates. We've also announced several acquisitions and new hospital partnerships in key markets, which will drive long-term value and enhance our ability to serve patients. We have a clear strategy for the coming year and look forward to executing it with the support of our partners and teams nationwide.”

U.S. Physical Therapy Total Revenue

Since releasing its results, U.S. Physical Therapy’s stock has climbed 1.4% and is now trading at $82.84.

Curious if U.S. Physical Therapy is a good buy right now?

Top Q4 Performer: DaVita (NYSE:DVA)

DaVita operates more than 2,600 dialysis centers across the U.S. and is present in 13 countries, providing care for patients with chronic and end-stage kidney disease.

The company posted $3.62 billion in revenue for the quarter, a 9.9% year-over-year increase and 3.2% above analyst estimates. DaVita also exceeded full-year EPS and revenue expectations, delivering an impressive quarter.

DaVita Total Revenue

Investors responded positively, with DaVita’s stock surging 36.7% since the earnings release to $152.01.

Thinking about investing in DaVita?

Q4’s Weakest: Surgery Partners (NASDAQ:SGRY)

Surgery Partners runs over 180 outpatient surgical facilities in 33 states, offering alternatives to traditional hospital-based surgeries through ambulatory centers and short-stay hospitals.

For the quarter, the company reported $885 million in revenue, a 2.4% year-over-year increase and 1.9% above analyst forecasts. However, full-year revenue and EBITDA guidance fell well short of expectations, making for a disappointing quarter.

Surgery Partners experienced the slowest revenue growth and weakest guidance among its peers. Its stock has dropped 13.3% since the earnings report and is now at $13.78.

Select Medical (NYSE:SEM)

Select Medical operates a vast network of over 2,700 healthcare facilities in 46 states, including critical illness recovery hospitals, rehabilitation centers, outpatient clinics, and occupational health locations.

The company reported $1.40 billion in revenue for Q4, a 6.4% increase year-over-year and 2.3% above analyst expectations. Despite this, Select Medical missed full-year EPS guidance and analyst EPS estimates by a significant margin.

Notably, Select Medical provided the largest full-year guidance increase among its peers. The stock price has remained steady since the earnings release, currently trading at $16.19.

Encompass Health (NYSE:EHC)

Encompass Health manages 161 specialized rehabilitation hospitals in 37 states and Puerto Rico, helping patients recover from strokes, hip fractures, and other serious conditions.

For Q4, Encompass Health reported $1.54 billion in revenue, up 9.9% year-over-year and in line with analyst expectations. The company also surpassed full-year EPS guidance, though full-year revenue guidance matched expectations.

Among its peers, Encompass Health had the least favorable performance relative to analyst estimates. Its stock has risen 8.5% since the earnings announcement and is now at $107.99.

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