Multiples in the healthcare services sector

BVWireIssue #153-4
June 24, 2015

The S&P Healthcare Services Index has decreased by 2.0% over the last three months, underperforming the S&P 500 (a 0.1% increase over the same period), according to the June 2015 Healthcare Sector Update from Duff & Phelps. The best performing sectors were emergency services (up 18.8%) and special managed care (up 17.4%). The worst performing sectors were diagnostic imaging (down 23.1%) and healthcare REITs (down 8.6%).

The current median LTM revenue and LTM EBITDA multiples for the healthcare services industry overall are 1.76x and 13.1x, respectively. The sectors with the highest valuation multiples include: HCIT (3.7x LTM revenue, 19.5x LTM EBITDA), healthcare REITs (12.0x LTM revenue, 17.4x LTM EBITDA), consumer-directed health and wellness (3.4x LTM revenue, 20.8x LTM EBITDA), and other services (2.0x LTM revenue, 27.2x LTM EBITDA).

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