PACS Shares Rally; CEO Sees ‘Silver Lining’ with Blue Congress

PACS Group held its third quarter 2026 earnings call with analysts on Nov. 4, touting its strong results released a day earlier, which helped propel the company’s stock to a new all-time high at $51.68 per share, a far cry from last November when shares traded in the $10 per share range.

Jason Murray, PACS CEO, and co-founder and board chair, said the clearest evidence of the provider’s success “is in our same-store results across our 284 skilled nursing facilities. Within our same-store portfolio, revenue increased 6.4 percent year over year, occupancy improved by 200 basis points to 91.3 percent, and skilled mix increased on both the revenue and per patient and patient day basis. These results demonstrate continued improvement within the facilities we already operate and reinforce our confidence in the organic growth opportunity across the platform.”

Newly acquired facilities are entering the portfolio as well. PACS closed on 31 of 34 skilled nursing operations associated with its Aduro transaction, including 20 facilities in Texas on Aug. 1 and 11 facilities across South Dakota, North Dakota, New Mexico, and Montana on Sept. 1.

Murray said the additions entered PACS at lower occupancy and skilled mix levels than its established portfolio, bringing down certain consolidated averages this quarter.

Excluding the 31 Enduro facilities, PACS said its third quarter occupancy would have been 91 percent compared with reported occupancy of 90.2 percent, and up from total occupancy of 90.4 percent in the second quarter of 2026. Skilled mix by nursing patient days would have been 29.9 percent compared with the reported 29.1 percent, PACS said.

Murray said as of Sept. 30, PACS operates 355 healthcare facilities across 20 states with 38,774 total beds, including 30,933 skilled nursing beds and 2,841 assisted living beds.

Off the SFF List

As an example of how PACS is able to turn facilities it acquires around, Murray said he is particularly proud of progress at a newly acquired SNF in Tennessee.

“The facility faced significant clinical, operational, and physical plant challenges and was formally designated by CMS as a Special Focus Facility [SFF]. . .Our regional leaders recognized committed people already within the building and invested in their development,” he said.

“With new administrative leadership and dedicated regional clinical support, the local team strengthened clinical oversight, infection prevention, employee education, accountability, and follow-through in daily care. The work was hands-on and sustained. Employees completed more than 25 in-service training sessions, and regional clinical leaders worked alongside the team to reinforce standards and turn recommendations into everyday practice. The team then successfully completed its first two standard surveys under PACS Group ownership in March and July 2026,” Murray said.

Those were the two qualifying surveys needed for graduation, and the facility officially graduated from the SFF program effective Sept. 16.

“During the Special Focus Facility period, occupancy increased from approximately 70 percent to nearly 85 percent. What stands out to me is the combination of committed people, education, support, and accountability,” Murray said.

Other Matters

Here are some other highlights from the call:

-          PACS said on Oct. 1, the company completed the acquisition of 32 skilled nursing operations in Florida, adding 4,049 skilled nursing beds and establishing its presence in a new state.

-          PACS also completed the acquisition of 10 skilled nursing operations and one assisted living operation in Texas on Nov. 1.

-          Murray said the company continues to “engage constructively and cooperate fully with the government as we work towards a resolution” of a federal investigation into referral and reimbursement practices. “We believe the constructive engagement to date has provided a productive foundation for continuing to work through these matters. While we cannot predict the timing or ultimate outcome of these processes, we remain confident in our approach and in our ability to bring these matters to an appropriate resolution,” he said.

-          For full-year 2026, PACS is increasing its revenue guidance to $5.95 billion to $6.05 billion and our adjusted EBITDA guidance to $685 million to $695 million. That’s a $200 million increase in the revenue guidance range and a $40 million increase in the midpoint of its adjusted EBITDA guidance range. At the midpoint, these ranges represent revenue growth of 13.13 percent and adjusted EBITDA growth of 37 percent over 2025. PACS said the updated outlook reflects the continued strength of its existing portfolio and includes $5 million of EBITDA contribution from retroactive quality incentive payments in Ohio that it received in October.

Blue Congress

Murray, in response to a question from a Wall Street analyst, said the Democratic success in the midterms must be assessed for its impact on the skilled nursing sector.

“I think the initial reaction for us is that we’re pretty measured with what we’re seeing there. Typically, what happens when you see Republicans in control of Congress, maybe there’s some challenges and pressures on rate, but there’s usually relief on the regulatory front. With Democrats, it’s the opposite of that. We will continue to fight, and we have done so successfully over the last several years some of the challenges around the minimum staffing. We feel like we’re in a decent place there as an industry to push back on those requirements,” he said.

“Listen, we work in a very highly regulated industry. Working in that environment is what I would call normal operating for us. While it doesn’t feel good to have additional scrutiny around the regulatory environment, that is what we do, and we feel like we do this very well as a company, and we’ve built the infrastructure to help support our local teams to adapt to any type of change that may be coming that way. We feel like we’re positioned well there.”

A silver lining from any increase in scrutiny is the potential of increased reimbursement. “The Democrats have traditionally been very good at making sure the entitlement programs are funded from Medicaid and Medicare in the different states where we operate. We look forward to seeing that trend hopefully continue, and we feel like as a sector we will benefit from that,” Murray said.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.