Pennant Group, Inc.

PNTGdata completeness 100%9 fiscal years on file
The thesis, from the filings

Pennant Group, Inc. earns about 6% on invested capital, below its ~9% cost of capital, but has diluted owners by 15% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $3.93 and $12.08 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$439.7M1$473.2M2$544.9M3$695.2M3$947.7M3
Net income$2.7M4$6.64M5$13.4M6$22.6M6$29.6M6
Operating cash flow−$18.2M7$9.04M8$33.1M9$39.3M9$48.3M9
Capital expenditure$6.3M10$14.2M11$8.11M12$8.99M12$12M12
Free cash flow (derived)−$24.5M7−$5.13M8$25M9$30.3M9$36.3M9
Total debt$51.4M13$62.9M14$63.9M15$016$173.8M16
Cash & equivalents$5.19M17$2.08M18$6.06M18$24.2M18$17M18
Diluted shares30.6M30.2M30.2M32.0M35.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$105.97
your share of equity
Profit it earned you last year
$8.38
Free cash flow it threw off
$10.27
Debt you’d be carrying
$49.22

10 shares is a claim on $105.97 of net worth that earned you $8.38 and generated $10.27 of cash last year, against $49.22 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
6% avg · 5y
FY21 2%FY22 6%FY23 9%FY24 8%FY25 6%

It earned about 6% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+15% shares · 5y

Share count is up 15% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 238% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $3.93 and $12.08 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$12.08
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$30.3M
DCF · Growth Exit 5Y
$10.79
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$30.3M
Earnings Power Value
$3.93
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$13.4M
  • growthAssumed0.0%
Graham Number
$14.15
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $10.79
The three cases
Bear0.0%$7.82
Base5.0%$10.79
Bull10.0%$14.34

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001766400-24-000022 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001766400-25-000024 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001766400-26-000014 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001766400-24-000022 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001766400-25-000024 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001766400-26-000014 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001766400-24-000022 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001766400-25-000024 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001766400-26-000014 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001766400-24-000022 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001766400-25-000024 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001766400-26-000014 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001766400-23-000026 (LongTermDebt)
  14. 10-K · period ending 2022-12-31 · accession 0001766400-24-000022 (LongTermDebt)
  15. 10-K · period ending 2023-12-31 · accession 0001766400-25-000024 (LongTermDebt)
  16. 10-K · period ending 2024-12-31 · accession 0001766400-26-000014 (LongTermDebtCurrent)
  17. 10-K · period ending 2021-12-31 · accession 0001766400-25-000024 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)
  18. 10-K · period ending 2022-12-31 · accession 0001766400-26-000014 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)