PACS Group, Inc., a skilled nursing care facilities provider, has revised its credit agreement with Truist Bank and other lenders, according to an 8-K filing with the Securities and Exchange Commission. The amendment, effective as of Thursday, alters the timeline for the company to submit its unaudited quarterly financial statements.
Previously, PACS Group was required to present these statements within 45 days following the end of a fiscal quarter. The new amendment extends this deadline to 52 days for the quarter ending September 30, 2024, with the possibility of a further extension upon agreement with the Administrative Agent or certain Lenders.
This adjustment in the credit agreement's terms provides PACS Group with additional flexibility in reporting its financials. The company, which operates under the legal name PACS Group, Inc. and trades on the New York Stock Exchange under the ticker NYSE:PACS, is headquartered in Farmington, Utah.
The amendment is detailed in Exhibit 10.1 of the 8-K filing and is incorporated by reference into the report. The information contained in this article is based on the press release statement and aims to summarize the key facts of the amendment for investors and stakeholders without providing opinions or analysis.
In other recent news, PACS Group announced a delay in its Q3 financial results due to a federal investigation into reimbursement and referral practices. Despite this, PACS Group is expected to report over $600 million in cash and available liquidity by the end of the quarter. The company also recently expanded its operations by acquiring 56 facilities across six states, leading to high occupancy rates in its facilities.
JPMorgan (NYSE:JPM) and UBS have issued an Overweight and Buy rating respectively, for PACS Group, citing the company's growth strategy and demographic trends as key factors. JPMorgan set a price target of $40.00, while UBS set a target of $50.00. Citi also resumed coverage of PACS Group with a Buy rating, highlighting the company's positioning in a fragmented market and potential for margin expansion.
PACS Group reported an adjusted EBITDA of $99.7 million for Q2 2024, leading to an upward revision of its 2024 guidance. In addition, the company has launched a public offering of approximately 13.9 million shares of its common stock.
InvestingPro Insights
PACS Group's recent credit agreement amendment comes amid challenging market conditions for the company. According to InvestingPro data, PACS has experienced significant price declines, with a 54.97% drop in the past month and a 53.83% fall over the last three months. This context underscores the importance of the extended financial reporting deadline, potentially giving management more time to navigate current headwinds.
Despite these challenges, InvestingPro Tips highlight that four analysts have revised their earnings upwards for the upcoming period, suggesting some optimism about PACS's near-term prospects. Additionally, the company has remained profitable over the last twelve months, with a revenue of $3.56 billion and an operating income margin of 6.14%.
For investors considering PACS, it's worth noting that the stock is currently trading near its 52-week low, with its price at just 39.64% of its 52-week high. This could present an opportunity, especially given that analysts have set a fair value target of $42 per share, significantly above the current trading price.
InvestingPro offers 10 additional tips for PACS, providing a more comprehensive analysis for those interested in delving deeper into the company's financial health and market position.
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