Regis Healthcare (ASX:REG) Drops Below $7.20 on CEO Exit: A Buying Opportunity?

Regis Healthcare (ASX: REG) shares fell 2.6% to A$7.13 after CEO Dr Linda Mellors announced her resignation to pursue a career opportunity in a different industry. The departure ends a six-year tenure that transformed Regis Healthcare from a struggling business into one of the ASX’s best-performing healthcare stocks, with shares up more than 560% over five years. For investors, the big question is simple: Does this leadership change hurt the company’s growth story, or is this dip a chance to buy a quality business at a lower price?

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Mellors Leaves Behind a Transformed Business

When Dr Mellors took the helm in September 2019, the aged care sector was under intense scrutiny from a royal commission. Under her leadership, Regis Healthcare swung from a statutory loss of A$21.4 million in FY24 to a A$49 million net profit in FY25, reflecting the successful completion of its operational turnaround.
The numbers back this up. Revenue grew 14.5% to A$1.16 billion in FY25. Underlying EBITDA rose 17.4% to A$125.8 million. Occupancy at mature homes hit 95.6%, up from 94.1% the year before. We believe these results show real improvement in the business, not just a one-time boost.

Mellors also grew the company through aggressive, high-quality acquisitions. Over the past two years, Regis Healthcare has added 13 homes and more than 1,700 beds to its portfolio, including the strategic purchase of the Rockpool homes in Queensland and OC Health’s Victorian assets. The company now operates 74 aged care homes with approximately 8,450 beds and remains on track to reach its 10,000-bed target by FY28.

Why the Growth Story Still Looks Good

Even with the CEO leaving, several things suggest the investment case hasn’t changed much. Management kept its FY26 EBITDA guidance at A$130-135 million. This shows confidence that the business can deliver even during a leadership change.

Analysts still like the stock. The consensus rating is Buy with a price target of A$8.31. That’s about 16% above the current price. Some models suggest an even bigger upside, with Simply Wall St saying the stock trades roughly 60% below fair value.

The big picture also favours Regis Healthcare. Australia’s population is getting older, which means more people will need aged care services. Government funding reforms should also help the sector grow. These trends won’t change just because a CEO leaves.
The balance sheet is solid, too. Regis Healthcare had A$192 million in net cash as of June 2025, giving the company room to keep buying aged care homes and building new ones.

The Investor’s Takeaway

We believe this pullback is a buying chance for patient investors, not a warning sign. The business is in good shape, and the experienced management team can keep things running smoothly.

That said, changing CEOs during a growth phase always carries some risk. No replacement has been named yet, and this uncertainty could keep the share price under pressure for a while. Staff shortages and government rule changes are also ongoing challenges for the whole aged care sector.

For investors looking at Regis Healthcare, the risk-reward looks attractive at current prices. Analysts remain positive, the business is profitable, and the sector has strong tailwinds. However, if you prefer to play it safe, waiting until a new CEO is announced might make sense. The strong FY26 guidance gives us comfort that the growth plan will continue, but execution under new leadership will be the key thing to watch.