Select Medical (SEM) Up 10.2% After CMS Delays New Rule—Does This Shift Regulatory Risk?

• In the past week, Select Medical Holdings benefited from a decision by the Centers for Medicare & Medicaid Services (CMS) to delay implementation of a new rule, which the industry has interpreted as favorable for post-acute care providers.
• This regulatory pause is anticipated to provide a one-time benefit in the third quarter of 2025, offering some relief to the company amid prior financial headwinds.
• We'll examine how the CMS rule delay shapes Select Medical's investment outlook and its ability to mitigate ongoing regulatory risks.

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Select Medical Holdings Investment Narrative Recap

Owning shares of Select Medical Holdings requires confidence in the company’s ability to weather ongoing regulatory challenges, particularly exposure to shifting Medicare reimbursement rates and pressure on critical illness recovery margins. The recent CMS rule delay offers relief for the upcoming year, temporarily easing margin compression but not fundamentally changing the underlying risk of further reimbursement cuts, which remains the key challenge for Select Medical in the near term.

Among recent company announcements, the upcoming third-quarter earnings report scheduled for October 30, 2025, stands out as particularly relevant. This event will provide a clearer view of how the CMS decision and any resulting operational improvements may flow through Select Medical’s financial results and guidance, especially as investors look for signs of stabilization or continued pressure in admissions and revenue trends.

By contrast, the longer-term risks tied to persistent regulatory headwinds in reimbursement rates remain critical information investors should be aware of...

Read the full narrative on Select Medical Holdings (it's free!)

Select Medical Holdings' narrative projects $6.1 billion revenue and $233.8 million earnings by 2028. This requires 5.1% yearly revenue growth and a $152.7 million earnings increase from $81.1 million today.

Uncover how Select Medical Holdings' forecasts yield a $17.83 fair value, a 25% upside to its current price.

Exploring Other Perspectives

Fair value estimates from the Simply Wall St Community range between US$17.83 and US$42.91, based on two individual perspectives. With regulatory pressures still at the forefront, readers can see just how much opinions differ on the company's path forward, consider exploring several viewpoints before making decisions.

Explore 2 other fair value estimates on Select Medical Holdings - why the stock might be worth just $17.83!

Build Your Own Select Medical Holdings Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Select Medical Holdings research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Select Medical Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Select Medical Holdings' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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