U.S. Physical Therapy Q3 Earnings: Can NYSE:USPH Hit Its $0.51 EPS Target?

in EARNINGS/INVESTING IDEAS by

U.S. Physical Therapy, Inc. (NYSE:USPH) is scheduled to report Q3 earnings results before markets open for trading on November 5, 2020.

The company is expected to report earnings of $0.51/share on revenue of $103.4 million. The consensus earnings per share (EPS) of $0.51/share is based on a poll of 5 analysts and represents a decline in eps of −27.9% over the same quarter last year, when the company reported earnings of $0.71/share.

The revenue forecast of $103.4 million based on a poll of 5 analysts implies a year-over-year (YoY) decline in revenue of −11.8%. Last year the company reported $117.3 million in revenue for the quarter.

Expected to report EPS contraction of −27.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $103.43 $117.25 −11.8%
EPS $0.51 $0.71 −27.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 2 quarters.

What are your expectations from U.S. Physical Therapy, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.18 $0.39 316.7% Beat
Q1, 2020 $0.32 $0.30 −7.0% Missed
Q4, 2019 $0.69 $0.64 −6.6% Missed
Q3, 2019 $0.71 $0.71 0% Met
Q2, 2019 $0.81 $0.81 0.0% Met
Q1, 2019 $0.61 $0.66 8.8% Beat
Q4, 2018 $0.63 $0.71 13.6% Beat
Q3, 2018 $0.58 $0.64 10.1% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 2.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $90.36 $92.57 2.4% Increase
May 21, 2020 $75.71 $74.97 −1.0% Decline
February 27, 2020 $126.59 $104.22 −17.7% Decline
November 7, 2019 $147 $117.50 −20.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.05, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.05 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

U.S. Physical Therapy, Inc. is currently trading at $79.33/share, up 3.1% for the day. The company is trading at approximately 53.4% of its 52-week high of $148.48/share. The company’s stock price is down −14.3% since the last earnings report and down −3.4% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 35.76 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:USPH Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 33.15 and a forward P/E multiple of 44.56.

U.S. Physical Therapy, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.99. The following table summarizes some other key fundamental ratios:

Data as of November 1, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $79.33
P/E Ratio 33.1x
P/E Ratio (Fwd) 44.6x
PEG Ratio 1.0
Total Debt / Total Capital 11.2%
Levered Free Cash Flow $72.242 million
EV / EBITDA 20.7x

Finbox

U.S. Physical Therapy, Inc. is a small-cap stock with a market capitalization of $1.019 billion and a total enterprise value of $1.255 billion. The company operates in the Healthcare sector and the Healthcare Providers & Services industry.

U.S. Physical Therapy, Inc., through its subsidiaries, operates outpatient physical therapy clinics that provide pre-and post-operative care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and neurological-related injuries. The company provides industrial injury prevention services, including onsite injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments through physical therapists and specialized certified athletic trainers for Fortune 500 companies, and other clients comprising insurers and their contractors. As of October 9, 2020, it operated 549 outpatient physical therapy clinics in 39 states; and managed 38 physical therapy facilities for unaffiliated third parties, including hospitals and physician groups. The company was founded in 1990 and is based in Houston, Texas.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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