Pacs Group shares drop 38% postmarket as CFO leaves amid probe

Pacs Group shares drop 38% postmarket as CFO leaves amid probe

Pacs Group, Inc. (NYSE: PACS) shares plummeted 38% in after-hours trading on September 2, 2025, following the resignation of its Chief Financial Officer (CFO), Derick Apt, amidst an ongoing probe [1]. The stock closed the day at $11.32, down from $18.42 at the start of the trading session.

The resignation of Apt, who had been with the company for several years, comes as the company is under scrutiny for alleged financial misconduct. Pacs Group recently announced that it had entered a forbearance agreement and amended its credit agreement, further adding to the uncertainty surrounding the company [1].

Pacs Group operates in the post-acute healthcare sector, providing skilled nursing care and other services. The company's stock has been under pressure due to allegations from the Hindenburg Research group, which claimed that Pacs Group was inflating its numbers by abusing COVID-era waivers and misleading investors with incorrect CMS ratings. The company has since estimated that its revenue was overstated by $15M to $17M for the quarter ended March 30, 2024, and $46M to $48M for the quarter ended June 30, 2024 [2].

The company has been working to regain investor confidence by restating financial statements and addressing delinquency issues. However, the resignation of the CFO and the ongoing probe have led to a significant sell-off in the stock. The company has until September 2, 2025, to file all delinquent earnings.

Analysts' recommendations for Pacs Group have been mixed. While some have maintained a buy rating, others have downgraded the stock due to the ongoing probe and the company's financial restatements. Truist Securities, for example, cut its price target to $32 from $46 while maintaining a buy rating. JPMorgan downgraded Pacs Group to neutral from overweight, adjusting its price target to $18 from $40 [1].

Despite the challenges, Pacs Group's fundamentals remain intact, with a strong portfolio of post-acute care and senior living facilities. The company's occupancy rate remains high, with mature facilities displaying a rate of around 93% [2].

Investors should closely monitor the developments surrounding Pacs Group, as the company's ability to navigate the ongoing probe and restore investor confidence will be crucial in determining its stock's future performance.

References:

[1] https://www.marketscreener.com/quote/stock/PACS-GROUP-INC-168244873/
[2] https://finance.yahoo.com/news/pacs-group-pacs-bull-case-181422547.html