Direct Answer
4 SEC filers are classified under the Standard Industrial Classification codes that describe the skilled nursing facilities industry, and their latest annual reports show $13.9 billion of combined revenue and a median operating margin of 5.9%. Investors should still evaluate its revenue model, industry-specific KPIs, valuation framework and the risks that can change the group's economics.
Industry Overview
Skilled nursing facility operators run nursing homes that provide short-term rehabilitation and long-term care, paid by Medicare, Medicaid and private payers. Occupancy, payer mix and staffing cost determine results. The first numbers to compare across companies here are occupancy, skilled mix and revenue per patient day and labor cost ratio.
Key Industry Metrics
- Occupancy: Share of licensed beds filled. Fixed building and staff cost mean occupancy changes move profit.
- Skilled mix and revenue per patient day: Share of residents on higher-paying short-term skilled care and average daily payment. A higher skilled mix raises revenue per day.
- Labor cost ratio: Wages and contract labor relative to revenue. A rising ratio means staffing cost is outpacing payment rates.
- Operating margin: Share of revenue left after operating costs. Thin margins make it sensitive to occupancy, mix and wages.
- Medicaid rate adequacy: Whether state Medicaid payments cover the cost of long-term care. Inadequate rates press margins since many residents are covered by Medicaid.
Primary Macro Drivers
- Aging population and hospital discharges: Patients leave hospitals needing rehab and nursing, so older population and discharge volumes support occupancy and skilled mix.
- Medicare payment rules: Medicare pays a set amount based on patient needs, so annual rule changes move revenue per patient day and margin.
- Medicaid rates: States set Medicaid rates for long-term residents, so rate levels move revenue per patient day for that group.
- Staffing availability: Nurses and aides are the main cost, so staff availability sets occupancy and labor cost ratio.
Major Risks
- Reimbursement cuts: Lower Medicare or Medicaid payments cut revenue per patient day while wages rise; watch final payment rules and operating margin.
- Staffing and wage inflation: Shortages require agency staff and overtime, which raise cost and may limit admissions; watch labor cost ratio and occupancy.
- Regulation and litigation: Inspections, staffing rules and lawsuits can bring fines and settlements; watch legal proceedings and regulatory disclosures.
- Occupancy swings: Declines in occupancy leave fixed costs spread over fewer residents, so margin falls quickly; watch occupancy and skilled mix.
Industry Characteristics
| Characteristic | Profile |
|---|---|
| Cyclicality | Defensive |
| Capital Intensity | Medium |
| Regulatory Intensity | High |
| Industry Maturity | Mature |
| Geographic Importance | U.S. |
Skilled Nursing Facilities Filers in the SEC Record
4 companies with annual reports in the dataset are classified by the SEC in the Standard Industrial Classification codes 8050, 8051. Their latest fiscal years end in 2025, and together they reported $13.9 billion of revenue. Median revenue growth over the prior year was 22.0%. Median operating margin was 5.9% and median net margin -2.3%. Median total liabilities were 88% of total assets, and 2 of 4 reported a profit in their latest year.
| Company | Revenue | Growth | Operating margin | Net margin | Year |
|---|---|---|---|---|---|
| Pacs Group, Inc. | $5.3 billion | 29.3% | 5.9% | 3.6% | FY 2025 |
| Ensign Group, Inc | $5.1 billion | 18.7% | 8.4% | 6.8% | FY 2025 |
| Brookdale Senior Living Inc. | $3.2 billion | 2.2% | 0.4% | -8.2% | FY 2025 |
| Sonida Senior Living, Inc. | $381 million | 25.2% | n/a | -19.0% | FY 2025 |
Source: each company's own annual report as filed with the SEC (XBRL data), figures in U.S. dollars. A company's SIC code reflects its main business as the SEC records it, so it can differ from how an index provider or analyst classifies the company, and a diversified group appears under only one code.
Where to Go Next
The Skilled Nursing Facilities guide describes how the industry earns money, what to measure and what can go wrong. To see how it compares, read the neighbouring industries in the same sector, then apply the same checks to a specific company.
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Frequently Asked Questions
What are the main KPIs for the Skilled Nursing Facilities industry?
Key performance indicators for the Skilled Nursing Facilities industry include: Occupancy, Skilled mix and revenue per patient day, Labor cost ratio, Operating margin, Medicaid rate adequacy. Which matter most depends on the company's model, so compare them across several companies rather than relying on one.
How cyclical is the Skilled Nursing Facilities industry?
The Skilled Nursing Facilities industry is generally defensive, meaning demand tends to remain relatively stable regardless of the economic cycle. Companies in this space can provide portfolio stability during recessions, though growth may lag in strong expansions.
What are the biggest risks in the Skilled Nursing Facilities industry?
The primary risks for Skilled Nursing Facilities companies include: Reimbursement cuts, Staffing and wage inflation, Regulation and litigation, Occupancy swings. Investors should assess each company's exposure to these factors and its track record of navigating them.