Extendicare (EXE) AI Stock Analysis

• Market Cap: C$1.09B
• Dividend Yield: 3.68%
• Average Volume (3M): 241.51K
• Price to Earnings (P/E): 14.6
• Beta (1Y): 0.72
• Revenue Growth: 12.62%
• EPS Growth: 269.69%
• Country: CA
• Employees: 22,000
• Sector: Healthcare
• Sector Strength: 74
• Industry: Healthcare Providers & Services
• EPS (TTM): 0.89
• Shares Outstanding: 83,467,000
• 10 Day Avg. Volume: 326,743
• 30 Day Avg. Volume: 241,506
• PEG Ratio: 0.12
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.76
• Price to Cash Flow (P/CF): 6.40
• P/FCF Ratio: 7.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$13.25
• Price Target Upside: 1.61% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Extendicare demonstrates strong financial performance with significant revenue growth and improved cash flow, though operational efficiency and high leverage remain challenges. The stock shows positive technical momentum but is in overbought territory, suggesting caution. Valuation is attractive, supported by reasonable P/E and solid dividend yield. Earnings call insights reinforce the company's growth trajectory, adding to the positive outlook.

Positive Factors

Demographics and Demand

EXE is expected to benefit from aging demographics and a sizable LTC waitlist in Ontario, which should drive demand tailwinds.

Operating Metrics

Strong improvements in operating metrics within the LTC and home health businesses have led to leading price performance amongst Canadian seniors.

Negative Factors

Market Preferences

There is currently a preference for companies with exposure to private-pay retirement residences.

Extendicare Business Overview & Revenue Model

Company Description

Extendicare (EXE) is a leading provider of care and services for seniors across Canada. The company operates in the healthcare sector, primarily focusing on long-term care, home health care, and retirement living. Extendicare's core services include nursing care, rehabilitation, and support services, aimed at enhancing the quality of life for its residents and clients. With a commitment to delivering compassionate care, Extendicare serves communities through its network of long-term care homes, retirement communities, and home health care operations.

How the Company Makes Money

Extendicare generates revenue through several key streams. The primary source of income is its long-term care services, where the company receives funding from provincial governments for providing personal and medical care to residents in its facilities. Additionally, Extendicare earns from its home health care segment by offering nursing and personal support services to clients in their homes, funded through a combination of government contracts and private pay clients. The retirement living segment also contributes to revenue through rental income from its various retirement communities. Furthermore, Extendicare engages in strategic partnerships and alliances to enhance service delivery and optimize operational efficiencies, which can lead to cost savings and additional revenue opportunities.

Extendicare Financial Statement Overview

Summary

Extendicare shows strong revenue growth and improving net income margins, supported by effective cash flow generation. However, operational efficiency challenges and high leverage are concerns. The balance sheet reflects significant debt usage, but improved return on equity and positive cash flow trends are favorable indicators.

Income Statement

Extendicare has demonstrated strong revenue growth with a 12.39% increase from 2023 to 2024. The gross profit margin is robust at 100% for 2024 due to the accounting treatment, while the net profit margin improved significantly to 5.13% from 2.60% in 2023. The EBIT margin dropped to 0% in 2024, indicating operational challenges despite the revenue increase. Overall, profitability is improving but operational efficiency requires attention.

Balance Sheet

The company's debt-to-equity ratio remains high at 2.35, indicating significant leverage, although it has decreased from previous years. The return on equity has improved to 60.49% in 2024, showing better utilization of equity for generating profits. However, the equity ratio of 17.28% suggests a relatively low equity base compared to total assets, indicating a reliance on debt financing.

Cash Flow

Extendicare's free cash flow has turned positive in 2024, growing from a negative figure in 2023 to a strong positive figure, indicating improved cash generation. The operating cash flow to net income ratio is 1.91, showing efficient cash conversion from earnings. The free cash flow to net income ratio is 1.35, further reinforcing effective cash flow management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.47B	1.30B	1.22B	1.22B	1.16B
	Gross Profit
1.47B	118.43M	76.83M	151.72M	197.69M
	EBIT
0.00	62.96M	20.99M	56.62M	93.30M
	EBITDA
155.27M	98.63M	48.90M	67.46M	125.08M
	Net Income Common Stockholders
75.21M	33.98M	-4.51M	9.01M	42.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
121.85M	75.91M	167.28M	104.63M	179.96M
	Total Assets
719.79M	672.73M	781.58M	900.32M	963.13M
	Total Debt
292.49M	334.52M	383.97M	536.85M	564.60M
	Net Debt
170.64M	259.33M	216.69M	432.22M	384.64M
	Total Liabilities
595.44M	584.81M	680.88M	798.40M	834.94M
	Stockholders Equity
124.35M	87.92M	100.70M	101.92M	128.19M
Cash Flow		Free Cash Flow
101.69M	-106.13M	-2.92M	-6.10M	88.17M
	Operating Cash Flow
143.64M	23.28M	98.71M	63.42M	121.27M
	Investing Cash Flow
-9.11M	-84.45M	155.64M	-63.73M	2.00M
	Financing Cash Flow
-87.87M	-30.93M	-191.86M	-74.84M	-38.16M

Extendicare Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EXE, the sentiment is Positive. The current price of 13.04 is above the 20-day moving average (MA) of 11.82, above the 50-day MA of 10.93, and above the 200-day MA of 9.12, indicating a bullish trend. The MACD of 0.64 indicates Negative momentum. The RSI at 80.15 is Negative, neither overbought nor oversold. The STOCH value of 94.82 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EXE.

Extendicare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EXE	81 Outperform	C$1.09B	14.60	70.86%	3.68%	12.62%	269.69%
DR	73 Outperform	$396.82M	15.93	25.19%	2.13%	0.54%	276.35%
SIA	62 Neutral	C$1.47B	31.76	8.99%	5.85%	13.72%	429.22%
KPT	59 Neutral	C$80.15M	33.21	3.53%	8.89%	―	―
Sector *	49 Neutral	$7.05B	0.34	-55.09%	2.46%	25.27%	-3.43%

Extendicare Corporate Events

Extendicare Reports Strong Q4 2024 Results and Announces Dividend Increase

Extendicare reported a significant increase in adjusted EBITDA for the fourth quarter of 2024, driven by improvements across all business segments. The company completed several strategic initiatives, including acquiring LTC homes from Revera Inc., opening new facilities, and redeeming convertible debentures, which strengthened its financial position. The company also announced a 5% increase in its monthly dividend, reflecting its improved performance and growth prospects.

Extendicare Announces Board of Directors Changes

Extendicare Inc., a company listed on the Toronto Stock Exchange, has announced changes to its board of directors. Donald Clow and Heather-Anne Irwin have been appointed to the board, replacing Al Mawani who is retiring after seven years of service. These appointments bring the board back to nine directors. Clow brings extensive experience in the real estate sector, having held executive roles at Crombie REIT and other organizations, while Irwin has a strong background in finance and capital markets, currently serving on the boards of Artis REIT and the Ontario Financing Authority.

Extendicare Declares February 2025 Dividend, Reinforcing Shareholder Value

Extendicare Inc. has announced a C$0.04 cash dividend per common share for February 2025, payable on March 17, 2025, to shareholders recorded by February 28, 2025. This announcement signifies the company’s ongoing commitment to providing shareholder value and reflects its stable financial standing. The dividend, characterized as an ‘eligible dividend’ under Canadian tax law, underscores Extendicare’s strategic focus on maintaining consistent returns for investors while continuing to support the growing needs of the senior population through its extensive care and service operations.

Extendicare Declares C$0.04 January Dividend, Strengthening Investor Returns

Extendicare Inc. has declared a cash dividend of C$0.04 per common share for January 2025, payable to shareholders on February 14, 2025. This announcement reflects the company’s commitment to providing regular returns to its investors, reinforcing Extendicare’s stable financial strategy amidst its ongoing dedication to senior care services in Canada.

Extendicare to Release 2024 Q4 Financial Results and Host Conference Call

Extendicare has announced the release of its fourth quarter 2024 financial results on February 27, 2025, followed by a conference call on February 28, 2025, to discuss the outcomes. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and operational strategies, reinforcing its commitment to transparency and stakeholder engagement.