Why Grow Slow? PACS Sees a Path to Rapid Expansion

Leaders of PACS Group (NYSE: PACS) on Sept. 15 told an audience at the 2026 Jefferies Healthcare Services and Technology Conference in Nashville that it wants to accelerate its SNF acquisitions and sees continued positive results from targeting of underperforming facilities.

Speaking for the long-term care juggernaut were Jason Murray, CEO and chairman of the board; Carey Hendrickson, CFO; and Josh Jergensen, COO.

“This model is one where we target underperforming facilities, facilities that have not reached their full potential operationally, and we have a leadership model, an operational model that we deploy in those facilities, and we work to turn the operations around and add value to those locations,” Murray said.

Founded in 2014 with two facilities, the company now has a portfolio of 358 buildings.

“We believe strongly that everything that we do, all the success that we've been able to achieve at our facility-level as an organization begins with quality care,” Murray noted.

Administrators Are the Focus

Hendrickson said the nuts and bolts of how PACS gets started in moving the underperforming SNFs to improved quality and financial results starts with the people in charge of each facility.

“We generally start with assessing the leadership in the facility, at the administrator position. The administrator hangs their license on the wall, they're responsible to run to the day-to-day operations, and unfortunately, in our space, we haven't always attracted the best and the brightest, the most sophisticated operators,” he said.

“And for us, that was a heavy investment that we made early on, which was teaching and training, recruiting what I would say is a non-typical nursing home administrator, someone who's entrepreneurial, who's driven, who cares about the business, but understands that there are levers when you're running a business that you must pull in order to have great outcomes, and have those outcomes be great clinically and also financially.”

PACS prides itself on its robust administrator-in-training program and currently has about 50 AITs on its so-called bench, he said.

Plans Now

CFO Jergensen said the company is experiencing strong results for 2026 and sees plenty of space to expand even further, even after the recent news that it would be moving into Florida and acquiring 32 facilities there.

“I think you'll see us have a rapid pace of growth through the next few years. We have a lot of acquisitions that we're looking at,” he said.

“There's a lot in the pipeline, a very healthy pipeline. And when I think about the allocation of capital, those acquisitions are usually the highest and best use of capital, and we're looking at doing by some by purchasing real estate, so that's another opportunity for capital allocation, but in each case we're looking at we ask, ‘What's the highest adjusted risk return that we can achieve’?”

What Happened in the Second Quarter?

In early August, PACS reported second-quarter earnings with revenue of $1.43 billion, an increase of 9.1 percent over prior year. Net income was $76.3 million, an increase of $25.4 million, or 49.8 percent from $51.0 million in the prior-year period. Adjusted EBITDA was $166.8 million, an increase of $32.9 million, or 24.6 percent from $133.9 million in the prior-year period. Adjusted EBITDAR was $261.5 million.

Further, PACS said on a same-store basis, which includes the 284 SNFs operated by the company as of the beginning of 2025, SNF revenue increased 5.8 percent in the second quarter of 2026 compared to the prior-year period. Occupancy improved to 90.6 percent from 89.1 percent in the second quarter of 2025, and skilled mix increased in both revenue and nursing patient days.

The company had 239 facilities, or 83.6 percent, of its skilled nursing portfolio achieve a 4- or 5-star CMS Quality Measure Star rating, with its 184 mature facilities achieving an average rating of 4.5.

Overall occupancy was 90.4 percent, compared to an industry average of 79.5 percent. Mature facilities occupancy was 93.8 percent. And, mature facilities skilled mix was 31.9 percent, while overall skilled mix increased to 30.0 percent, an improvement of 100 basis points from 29.0 percent in the prior-year period.

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