VALUATION
The prime measure we use for valuation is a comparison of EV/EBITDA. The current valuation based on
L4Q data is in line with the median for the peer group and the stock price should increase as EBITDA
increases. Using estimated N4Q EBITDA and the current EV the ratio is 3.6, well below its potential
valuation.
It does not format well below, but Zacks shows FCHS's EV/EBITDA as twice as good as next best and about 5 times better than USPH
COMPARISON TABLE Ticker Price Mkt ROE P/E P/E P/B P/S EV/Rev. EV/EBITDA PEG Inst.
1/18/17 Cap (%) L4Q NFY LQ L4Q L4Q Ownership %
(in million)
First Choice Healthcare FCHS $1.48 $36.1 12.75 NM 22.3 2.83 1.42 1.16 5.16 0.7 NA
Solutions, Inc.
Community Health Systems CYH $7.11 $808 4.70 N/A 10.46 0.43 0.04 0.86 8.37 N/M 94.9
Envision Health Holdings EVHC $68.54 $8,050 14.65 107.10 13.81 6.22 2.67 2.00 8.32 1.18 100+
Foundation Healthcare Inc. FDNH $0.31 $6 N/A N/A N/A N/A 0.04 0.69 101.90 N/A 2.1
HealthSouth Inc HLS $41.74 $3,750 31.27 17.14 15.46 5.16 1.05 1.87 8.19 1.25 91.6
HCA Holdings HCA $80.93 $30,320 14.45 14.02 11.37 N/A 0.74 1.47 7.48 0.99 77.3
Kindred Healthcare Inc KND $7.75 $660 6.42 13.02 12.70 0.80 0.09 0.52 6.83 5.30 97.8
Lifepoint Health Inc. LPNT $61.35 $2,460 5.93 20.43 14.85 1.16 0.40 0.82 7.64 2.35 94.9
PRGX Global PRGX $5.95 $130 13.47 42.81 24.79 2.53 0.95 0.87 10.23 7.73 77.6
Select Medical Holdings SEM $14.80 $1,960 10.72 15.74 17.01 2.02 0.47 1.09 10.12 1.92 83.6
Surgery Partners Inc. SGRY $18.05 $875 23.72 82.22 21.24 N/A 0.81 2.05 9.62 0.32 N/A
Universal Health Services Inc. UHS $114.30 $10,990 17.04 16.99 14.16 2.75 1.14 1.51 8.52 1.83 95.6
US Physical Therapy Inc. USPH $70.80 $887 16.14 36.68 33.08 4.96 2.54 2.66 15.47 2.71 94.2
* Assumes zero net debt based on the sale of Marina Tow ers.
(Source: Yahoo Finance & Zacks eEsVtim/EaBteITsD)A for FCHS is based on N$Q estimates
Mean 14.27 36.62 17.60 2.89 0.95 1.35 15.99 2.39
Median 13.96 18.79 15.16 2.64 0.81 1.16 8.37 1.83
