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Extendicare, one of Canada’s major health care providers, lifted its revenue by 11.4% to C$383.44 million last quarter – but still fell shy of what analysts were hoping for, even with growing home care demand and recent expansion moves.
What does this mean?
The company’s latest results highlight both momentum and ongoing challenges. Revenue and profit climbed, fueled by recent acquisitions like nine long-term care homes from Revera and a 10.9% jump in home health care activity. That sent adjusted EBITDA up 15.4% to C$39.78 million and net earnings rising to C$31.93 million. Still, revenue missed analyst forecasts, showing that expectations ran high amid a flurry of industry dealmaking. Looking ahead, Extendicare expects its recent Closing the Gap acquisition and a new C$375 million credit facility to boost growth further, while Ontario’s long-term care funding is set to support redevelopment plans and future expansions.
Investors are eyeing Extendicare’s improving value – the stock trades at 14 times forward earnings, down from 18x just a few months ago. Analyst consensus expects a 17.8% upside from its C$12.66 closing price, helped by operational gains and supportive government policies. Plus, continued industry consolidation and public funding trends could keep powering earnings on the back of strategic dealmaking.
The bigger picture: Aging populations drive lasting industry change.
Stronger demand for home health care and sizable acquisitions are part of a much bigger shift across North America. As populations age, both policy changes and new capital are helping health care operators modernize facilities and expand services, potentially transforming the sector for years to come.
