CON

We rate Concentra Group Holdings Parent, Inc. (CON) as a Hold with a composite score of 58.9/100 at a current price of $23.41. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in stability (90th percentile) and momentum (70th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (28th percentile) and quality (51th percentile) tempers our overall conviction. We assign a No Moat rating (25/100), Medium uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Concentra Group Holdings Parent, Inc. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 58.9/100 places it at rank #799 in our full 7,333-stock universe. At $2.7B in market capitalization, Concentra Group Holdings Parent, Inc. is a mid-cap player in the Services space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 20% and momentum in the 70th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 28th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 29% (-30.6pp vs sector) narrow to operating margins of 17% (+13.1pp vs sector) and net margins of 8.6%, yielding a gross-to-net conversion rate of 30%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $23.41, Concentra Group Holdings Parent, Inc. is trading near fair value based on current fundamentals. Our value factor score of 65/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 16.6x (a 30% discount to the sector median of 23.7x), EV/EBITDA of 7.2x (discounted to peers), P/B of 7.8x, P/S of 1.4x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to Concentra Group Holdings Parent, Inc.. The stock presents a balanced risk profile: significant leverage (623% debt-to-equity) and low beta of 0.68 — while defensive, this may indicate limited upside participation in bull markets. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (623% debt-to-equity); low beta of 0.68 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 90th percentile and quality factor at the 51th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: above-average stability (90th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Concentra Group Holdings Parent, Inc.'s capital allocation as Poor. Key concerns include elevated leverage (623% D/E). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Concentra Group Holdings Parent, Inc. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, Concentra Group Holdings Parent, Inc. receives a Hold rating with a composite score of 58.9/100 (rank #799 of 7,333). Our quantitative framework assigns a No Moat (25/100, trend: stable), Medium uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 61/100.

Our analysis supports a neutral stance on Concentra Group Holdings Parent, Inc.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.