Healthcare Services Sector Update – January 2021 M&A Advisory

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The S&P Healthcare Services Index increased by 6.5% over the last month, compared to the S&P 500 Index, which increased 1.1% over the same period.

Over the past month:

  • The sectors that experienced the most growth were Telemedicine (up 33.3%), Consumer Directed Health/Wellness (up 18.1%) and Providers – Other (up 14.8%).
  • The sectors that experienced the largest decline was Behavioral Health (down 7.9%), Care Management/TPA (down 4.5%) and Commercial Managed Care (down 3.9%).
  • The current average Last Twelve Months (LTM) revenue and LTM EBITDA multiples for the healthcare services industry overall are 1.97x and 10.7x, respectively.

Healthcare Services Sector Update - January 2021

The sectors with the highest valuation multiples include:

  • Home Health/Hospice (3.15x LTM revenue, 27.9x LTM EBITDA)
  • HCIT (4.26x LTM revenue, 27.5x LTM EBITDA)
  • Consumer Directed Health/Wellness (3.81x LTM revenue, 21.3x LTM EBITDA)
  • Contract Research Organizations (3.63x LTM revenue, 21.3x LTM EBITDA)
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