# LHC Group Inc. (LHCG) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/LHCG/thesis · /stocks/LHCG/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: LHCG
step: "04"
title: Financial Snapshot — 5-Year P&L Summary
created: 2026-05-29
---

### LHCG — Financial Snapshot

#### Income Statement Summary (FY2018–FY2022)

All figures in USD millions unless noted. Source: SEC EDGAR XBRL (CIK 0001303313).

| Metric | FY2018 | FY2019 | FY2020 | FY2021 | FY2022 |
|--------|--------|--------|--------|--------|--------|
| **Revenue** | $1,351M | $1,811M | $2,063M | $2,220M | $2,283M |
| YoY Growth | — | +34.0% | +13.9% | +7.6% | +2.8% |
| **Gross Profit** | ~$558M | ~$737M | $813M | $883M | $884M |
| Gross Margin | ~41.3% | ~40.7% | 39.4% | 39.8% | 38.7% |
| **Operating Income** | $111M | $152M | $178M | $186M | $109M |
| Operating Margin | 8.2% | 8.4% | 8.6% | 8.4% | 4.8% |
| **Net Income (attrib. to LHCG)** | ~$65M | ~$88M | ~$111M | ~$114M | ~$40M |
| Net Margin | ~4.8% | ~4.9% | 5.4% | 5.1% | 1.8% |
| **EPS (Diluted)** | ~$2.30 | ~$2.96 | $3.56 | $3.69 | $1.30 |
| **EBITDA (est.)** | ~$170M | ~$220M | ~$260M | ~$265M | ~$195M |
| EBITDA Margin | ~12.6% | ~12.1% | ~12.6% | ~11.9% | ~8.5% |
| **Adj. EBITDA (est.)** | ~$180M | ~$230M | ~$275M | ~$285M | ~$215M |
| Adj. EBITDA Margin | ~13.3% | ~12.7% | ~13.3% | ~12.8% | ~9.4% |

*EBITDA and Adj. EBITDA estimated from reported figures; Adj. EBITDA adds back stock-based comp, M&A costs, and other non-recurring items.*

#### Revenue Growth Context

- **FY2019 +34% growth**: Primarily driven by the Almost Family, Inc. acquisition (closed April 2018) — added ~$500M in annualized revenue including hospice and HCBS segments
- **FY2020 +13.9% growth**: Organic + tuck-in acquisitions; COVID-19 caused Q2 volume dip but Q3/Q4 recovery; COVID MAAP funds inflated cash flow
- **FY2021 +7.6% growth**: Solid organic growth; HCA-Brookdale acquisition added ~$80M in partial-year contribution
- **FY2022 +2.8% growth**: Slowest organic growth due to labor shortages constraining admissions capacity; staffing gaps reduced ability to take on new patients

#### FY2022 Margin Compression — Detailed Analysis

FY2022 was a year of significant earnings pressure from multiple simultaneous headwinds:

| Headwind | Estimated EBITDA Impact |
|----------|------------------------|
| Labor cost inflation (wages, travel nurses) | ~$(60–70)M |
| Reduced admissions capacity (labor gap) | ~$(15–20)M revenue impact |
| PDGM rate methodology changes | ~$(10–15)M |
| Acquisition-related costs (UHG deal) | ~$(20)M |
| **Total headwinds** | **~$(105–125)M** |

Despite the earnings trough, LHCG maintained solid revenue and the underlying business remained cash-generative. Adj. EBITDA of ~$215M vs. $5.4B acquisition price = ~25x acquisition EV/Adj. EBITDA on trough earnings — UnitedHealth clearly valued normalized earnings power (~$300–325M Adj. EBITDA potential as labor normalized).

#### Gross Profit Analysis

Gross margin contracted from 41.3% (FY2018) to 38.7% (FY2022):
- Primary driver: Cost of revenue as % of revenue increasing, mainly labor
- Home health gross margin historically ~42–44% (Medicare-heavy mix)
- Hospice gross margin ~48–52% (lower per-visit direct costs, longer patient stays)
- HCBS gross margin ~18–22% (labor-intensive, hourly model)
- Mix shift toward HCBS (lower margin) is a structural headwind

#### SG&A and Operating Leverage

| Year | SG&A (est.) | SG&A % Revenue |
|------|-------------|----------------|
| FY2018 | ~$447M | ~33.1% |
| FY2019 | ~$585M | ~32.3% |
| FY2020 | ~$635M | ~30.8% |
| FY2021 | ~$697M | ~31.4% |
| FY2022 | ~$775M | ~34.0% |

The SG&A increase in FY2022 reflects:
- ~$20M in merger/acquisition-related transaction costs (UHG deal)
- Administrative salary inflation
- Technology and compliance investments

#### Adjusted EPS Context

Reported FY2022 EPS of $1.30 was heavily distorted by:
- Merger-related costs (~$20M pre-tax = ~$0.50/share)
- Elevated SBC ($20M = ~$0.50/share non-cash)
- Labor cost peaks that were already normalizing in late 2022

Adjusted EPS for FY2022 was estimated at ~$4.50–$5.00 — more representative of normalized earnings power, and closer to the prior year $3.69 GAAP EPS.

#### Key Observations

1. **Steady compounder pre-FY2022**: LHCG grew revenue ~69% from FY2018 to FY2022 (CAGR ~14%, acquisition-assisted); EBITDA roughly doubled
2. **FY2022 was a temporary trough**: Labor normalization, deal cost removal, and census rebuild would have materially improved FY2023 earnings had LHCG remained public
3. **Acquisition premium justified on normalized earnings**: At $5.4B EV vs. ~$300M normalized EBITDA = ~18x normalized — premium to peers but not outrageous for a high-quality JV-model platform
4. **Gross margin durability**: Despite labor pressure, gross margin never fell below 38%; demonstrates pricing power and mix resiliency

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/LHCG/fundamental

## Navigation

- Overview: /stocks/LHCG
- Financials (this page): /stocks/LHCG/financials
- Thesis: /stocks/LHCG/thesis
- Investment Memo: /stocks/LHCG/memo
- Coverage universe: /stocks