What Happened?
Shares of outpatient physical therapy provider U.S. Physical Therapy (NYSE:USPH) jumped 3.7% in the afternoon session after RBC Capital upgraded the S&P 500 Health Care sector to Overweight, lifting stocks in the industry.
The upgrade was based on several positive factors, including attractive valuations, improving earnings trends, and renewed interest from investors. RBC Capital noted in a report that they considered the Health Care sector a "preferred defensive" area for investment. The firm also suggested that as investors look to shift their focus from technology stocks, the health care sector stood to gain. This broad positive sentiment for the entire sector likely contributed to the rise in U.S. Physical Therapy's shares.
After the initial pop the shares cooled down to $80.46, up 3.3% from previous close.
Is now the time to buy U.S. Physical Therapy? Access our full analysis report here.
What Is The Market Telling Us
U.S. Physical Therapy’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock dropped 11.5% on the news that the company reported third-quarter results that pointed to declining year-over-year profitability, despite revenue beating expectations.
The company announced adjusted earnings of $0.66 per share, which was in line with analyst estimates but represented a decrease from the $0.69 per share earned in the same quarter last year. While U.S. Physical Therapy's revenue grew 17.3% year-on-year to $197.1 million, surpassing Wall Street's forecast, the drop in per-share earnings appeared to be the primary concern for investors. The weaker profitability, alongside a slight miss on adjusted EBITDA, overshadowed the strong sales growth, leading to a negative market reaction.
U.S. Physical Therapy is down 8.4% since the beginning of the year, and at $80.46 per share, it is trading 13.6% below its 52-week high of $93.16 from October 2025. Investors who bought $1,000 worth of U.S. Physical Therapy’s shares 5 years ago would now be looking at an investment worth $672.25.
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