The Regis Healthcare Ltd (ASX: REG) share price is down 0.41% on Thursday morning. At the time of writing, the stock is changing hands at $7.71 a piece.
For the year, the share price is 56.07% higher.
The Australian residential aged care operator's share price closed in the red on Wednesday, after falling 1.75% to $7.85. The drop followed its FY25 financial results announcement on Wednesday morning.
For context, the S&P/ASX 200 Index (ASX: XJO) and the S&P/ASX 200 Health Care Index (ASX: XHJ) are down 0.084% and 1.32%, respectively, at the time of writing.
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Quick recap on Regis Healthcare's FY25 results
The ASX healthcare company posted a 15% year-on-year increase in its revenue for FY25, to $1.16 billion. Underlying EBITDA was also 17% higher over the year to $125.8 million.
Underlying EBIT was 26% higher at $77.3 million, and underlying NPAT was 37% higher at $53.4 million.
The company revealed net cash of $192 million, which is 197% higher than in FY25.
The board revealed it would pay a final dividend of 8.13 cents per share (70% franked), bringing the total FY25 dividends to 16.22 cents per ordinary share. The dividends have a record date of 10 September and a payment date of 24 September.
Macquarie's take on the ASX healthcare stock
Following the announcement, Macquarie Group Ltd (ASX: MQG) wrote a note to investors revealing its latest stance on Regis Healthcare shares.
It confirmed its outperform rating and raised its target price to $8.90, up from $8.10 previously.
At the time of writing on Thursday morning, this represents a potential upside of 15.4% for investors over the next 12 months.
"Valuation: DCF-derived TP at A$8.90 (from A$8.10) capturing EPS changes, model roll-forward and higher cash flow as new beds are completed," the broker said in its note.
"Retain Outperform. We see the outlook for residential aged care as positive, underpinned by favourable industry fundamentals and improved government funding. In addition, we see balance-sheet capacity for additional acquisitions, further supporting earnings growth."
What else did Macquarie have to say?
The broker said that Regis Healthcare outperformed Macquarie's forecasts for FY25 with services revenue supported by mature home occupancy of 95.6% and government revenue per operating day bed (POBD) of +11%.
For FY26, Macquarie forecasts a service revenue of A$1.29 billion and underlying EBITDA of A$144 million, implying an EBITDA margin expansion of 30 basis points and an 11.1% increase.
"This reflects higher exit rates for government revenue per operating bed day/POBD (~A$334.5 in 4Q25 vs ~A$299.5 in 1Q25), partly offset by increased employee expenses following Work Value Case increases, higher minimum award wages and EBA increases."
