EHC Stock Analysis: Encompass Health | NYSE
Medical Care Facilities | NYSE, USA | Market Cap: 11.934m USD | 12M Return: 0.9% | US29261A1007 | Charts, Fundamentals & Technical Analysis
Avg Turnover: 115M
EPS Trend: 99.8%
Qual. Beats: 14
Rev. Trend: 99.9%
Qual. Beats: 2
Warnings
No concerns identified
Tailwinds
Seasonality 11.7 years of data
How good or bad each month usually is (without trend). The score below shows how much you can trust it: 0 = pure chance, >40 gets interesting and >55 is strong.
Encompass Health Corporation (EHC) is a Birmingham, Alabama-based operator of inpatient rehabilitation hospitals across the United States and Puerto Rico. The company provides specialized rehabilitative care on an inpatient basis for patients recovering from major injuries, illnesses, and a range of conditions including stroke, neurological disorders, cardiac and pulmonary issues, brain and spinal cord injuries, complex orthopedic conditions, and amputations. Its services are reimbursed through Medicare, managed care plans, private insurers, state governments, and other payers. Originally incorporated in 1984 as HealthSouth Corporation, the company adopted its current name in January 2018 and trades on the NYSE as a large-cap stock within the GICS Health Care Facilities sub-industry.
As one of the largest U.S. providers of inpatient rehabilitation, Encompass Health operates within a healthcare segment that is heavily influenced by Medicare reimbursement policy, since Medicare is a primary payer for post-acute rehabilitation services. Inpatient rehabilitation facilities (IRFs) differ from general acute care hospitals and skilled nursing facilities in that they must meet Medicares 60% Rule, requiring at least 60% of patients to have a qualifying diagnosis typically treated with intensive therapy.
- Medicare reimbursement rate updates pressure inpatient rehab margins
- Wage inflation for nurses and therapists pressures operating margins
- New hospital openings drive same-store discharge volume growth
| Net Income: 621.0m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.06 > 0.02 and ΔFCF/TA -0.93 > 1.0 |
| NWC/Revenue: 2.70% < 20% (prev 0.93%; Δ 1.77% < -1%) |
| CFO/TA 0.16 > 3% & CFO 1.21b > Net Income 621.0m |
| Net Debt (2.94b) to EBITDA (1.50b): 1.96 < 3 |
| Current Ratio: 1.19 > 1.5 & < 3 |
| Outstanding Shares: last quarter (100.0m) vs 12m ago -2.15% < -2% |
| Gross Margin: 72.07% > 18% (prev 42.37%; Δ 29.70% > 0.5%) |
| Asset Turnover: 87.14% > 50% (prev 83.54%; Δ 3.60% > 0%) |
| Interest Coverage Ratio: 9.18 > 6 (EBIT TTM 1.15b / Interest Expense TTM 125.6m) |
| A: 0.02 (Total Current Assets 1.04b - Total Current Liabilities 873.4m) / Total Assets 7.46b |
| B: 0.21 (Retained Earnings 1.60b / Total Assets 7.46b) |
| C: 0.16 (EBIT TTM 1.15b / Avg Total Assets 7.12b) |
| D: 0.65 (Book Value of Equity 2.60b / Total Liabilities 4.00b) |
| Altman-Z'' = 2.62 = A |
| DSRI: 1.03 (Receivables 687.3m/612.5m, Revenue 6.21b/5.67b) |
| GMI: 0.59 (GM 42.37% / 72.07%) |
| AQI: 0.93 (AQ_t 0.25 / AQ_t-1 0.27) |
| SGI: 1.09 (Revenue 6.21b / 5.67b) |
| TATA: -0.08 (NI 621.0m - CFO 1.21b) / TA 7.46b) |
| Beneish M = -3.36 (Cap -4..+1) = AA |
As of October 10, 2026, the stock is trading at USD 123.33 with a total of 604,359 shares traded. Over the past week, the price has changed by +2.95%, over one month by +1.67%, over three months by +11.28% and over the past year by +0.88%.
Current recommended Stop Loss: 116.00 (which is 5.9% or 2.5 ATR below the current price).
Encompass Health has received a consensus analysts rating of 4.92. Therefore, it is recommended to buy EHC.
- StrongBuy: 12
- Buy: 1
- Hold: 0
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 148.2 | 20.1% |
P/E Trailing = 20.2291
P/E Forward = 18.9036
P/S = 1.923
P/B = 4.6412
P/EG = 0.4094
Revenue TTM = 6.21b USD
EBIT TTM = 1.15b USD
EBITDA TTM = 1.50b USD
Long Term Debt = 2.60b USD (from longTermDebt, last quarter)
Short Term Debt = 63.4m USD (from shortTermDebt, last quarter)
Debt = 3.05b USD (from shortLongTermDebtTotal, last quarter) + Leases 208.3m
Net Debt = 2.94b USD (calculated: Debt 3.05b - CCE 107.7m)
Enterprise Value = 14.9b USD (11.9b + Debt 3.05b - CCE 107.7m)
Interest Coverage Ratio = 9.18 (Ebit TTM 1.15b / Interest Expense TTM 125.6m)
EV/FCF = 35.99x (Enterprise Value 14.9b / FCF TTM 413.4m)
FCF Yield = 2.78% (FCF TTM 413.4m / Enterprise Value 14.9b)
FCF Margin = 6.66% (FCF TTM 413.4m / Revenue TTM 6.21b)
Net Margin = 10.01% (Net Income TTM 621.0m / Revenue TTM 6.21b)
Gross Margin = 72.07% ((Revenue TTM 6.21b - Cost of Revenue TTM 1.73b) / Revenue TTM)
Gross Margin QoQ = none% (prev 48.44%)
Tobins Q-Ratio = 1.99 (Enterprise Value 14.9b / Total Assets 7.46b)
Interest Expense / Debt = 4.12% (Interest Expense 125.6m / Debt 3.05b)
Taxrate = 20.46% (210.3m / 1.03b)
NOPAT = 917.5m (EBIT 1.15b * (1 - 20.46%))
Current Ratio = 1.19 (Total Current Assets 1.04b / Total Current Liabilities 873.4m)
Debt / Equity = 1.17 (Debt 3.05b / totalStockholderEquity, last quarter 2.60b)
Debt / EBITDA = 1.96 (Net Debt 2.94b / EBITDA 1.50b)
Debt / FCF = 7.12 (Net Debt 2.94b / FCF TTM 413.4m)
Total Stockholder Equity = 2.48b (last 4 quarters mean from totalStockholderEquity)
RoA = 8.72% (Net Income 621.0m / Total Assets 7.46b)
RoE = 25.01% (Net Income TTM 621.0m / Total Stockholder Equity 2.48b)
RoCE = 22.70% (EBIT 1.15b / Capital Employed (Equity 2.48b + L.T.Debt 2.60b))
RoIC = 14.03% (NOPAT 917.5m / Invested Capital 6.54b)
WACC = 6.80% (E(11.9b)/V(15.0b) * Re(7.70%) + D(3.05b)/V(15.0b) * Rd(4.12%) * (1-Tc(0.20)))
Discount Rate = 7.70% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -68.83 | Cagr: -0.96%
[DCF] Terminal Value 74.61% ; FCFF base≈423.7m ; Y1≈404.5m ; Y5≈387.4m
[DCF] Fair Price = 31.93 (EV 6.09b - Net Debt 2.94b = Equity 3.15b / Shares 98.7m; r=8.35% [WACC [floored]]; 5y FCF grow -5.87% → 2.50% )
EPS Correlation: 99.82 | EPS CAGR: 20.97% | SUE: 1.37 | # QB: 14
Revenue Correlation: 99.91 | Revenue CAGR: 10.88% | SUE: 1.96 | # QB: 2
EPS current Quarter (2026-09-30): EPS=1.36 | Chg30d=+0.00% | Revisions=+27% | Analysts=12
EPS current Year (2026-12-31): EPS=6.11 | Chg30d=-0.01% | Revisions=+81% | GrowthEPS=+12.2% | GrowthRev=+8.8%
EPS next Year (2027-12-31): EPS=6.68 | Chg30d=+0.00% | Revisions=+53% | GrowthEPS=+9.2% | GrowthRev=+8.3%
[Analyst] Revisions Ratio: +62% (up=31, down=6)