(EHC) Encompass Health - Overview
Sector: Healthcare | Industry: Medical Care Facilities | Exchange: NYSE (USA) | Market Cap: 10.412m USD | Total Return: -12.7% in 12m
Avg Turnover: 101M
EPS Trend: 99.9%
Qual. Beats: 13
Rev. Trend: 99.9%
Qual. Beats: 1
Warnings
Below Avwap Earnings
Tailwinds
Shakeout
Encompass Health Corporation (NYSE: EHC) is a leading provider of inpatient rehabilitation services in the United States and Puerto Rico. The company operates a network of specialized hospitals focused on restoring functional independence for patients recovering from stroke, neurological disorders, spinal cord injuries, and complex orthopedic conditions. Formerly known as HealthSouth Corporation, the firm rebranded in 2018 and maintains its headquarters in Birmingham, Alabama.
The business model relies heavily on the Medicare program, which accounts for a significant portion of revenue within the inpatient rehabilitation facility (IRF) sector. Unlike general acute-care hospitals, IRFs must adhere to the 60% Rule, a federal regulation requiring that a majority of patients have at least one of 13 specific medical conditions to qualify for higher reimbursement rates. This specialized focus requires intensive coordination between medical, nursing, and therapy services.
Investors can evaluate the company’s long-term valuation metrics and historical performance trends on ValueRay. Encompass Health continues to expand its footprint through the development of new de novo hospitals and the expansion of existing facilities to meet the demands of an aging U.S. demographic.
- Medicare reimbursement rate adjustments impact core inpatient rehabilitation facility revenue
- Aggressive hospital bed expansion strategy drives long-term volume growth targets
- Skilled nursing labor shortages and wage inflation pressure operating margins
- Demographic shifts toward an aging population increase demand for stroke recovery services
- Managed care penetration rates influence patient referral volumes and payment yields
| Net Income: 609.2m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.06 > 0.02 and ΔFCF/TA 0.53 > 1.0 |
| NWC/Revenue: 2.51% < 20% (prev 1.00%; Δ 1.51% < -1%) |
| CFO/TA 0.16 > 3% & CFO 1.20b > Net Income 609.2m |
| Net Debt (2.80b) to EBITDA (1.44b): 1.94 < 3 |
| Current Ratio: 1.17 > 1.5 & < 3 |
| Outstanding Shares: last quarter (100.6m) vs 12m ago -1.47% < -2% |
| Gross Margin: 58.82% > 18% (prev 0.42%; Δ 5.84k% > 0.5%) |
| Asset Turnover: 86.95% > 50% (prev 83.00%; Δ 3.94% > 0%) |
| Interest Coverage Ratio: 8.99 > 6 (EBITDA TTM 1.44b / Interest Expense TTM 123.2m) |
| A: 0.02 (Total Current Assets 1.03b - Total Current Liabilities 876.8m) / Total Assets 7.31b |
| B: 0.20 (Retained Earnings 1.46b / Total Assets 7.31b) |
| C: 0.16 (EBIT TTM 1.11b / Avg Total Assets 6.98b) |
| D: 0.37 (Book Value of Equity 1.47b / Total Liabilities 3.95b) |
| Altman-Z'' = 2.25 = BBB |
| DSRI: 0.99 (Receivables 676.0m/623.4m, Revenue 6.07b/5.51b) |
| GMI: 0.71 (GM 58.82% / 42.05%) |
| AQI: 0.95 (AQ_t 0.25 / AQ_t-1 0.27) |
| SGI: 1.10 (Revenue 6.07b / 5.51b) |
| TATA: -0.08 (NI 609.2m - CFO 1.20b) / TA 7.31b) |
| Beneish M = -3.34 (Cap -4..+1) = AA |
As of May 27, 2026, the stock is trading at USD 104.91 with a total of 430,508 shares traded.
Over the past week, the price has changed by -1.12%,
over one month by +3.95%,
over three months by -1.94% and
over the past year by -12.73%.
Encompass Health has received a consensus analysts rating of 4.83. Therefore, it is recommended to buy EHC.
- StrongBuy: 10
- Buy: 2
- Hold: 0
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 141.9 | 35.3% |
P/E Trailing = 17.9726
P/E Forward = 17.0648
P/S = 1.7163
P/B = 4.1289
P/EG = 0.4094
Revenue TTM = 6.07b USD
EBIT TTM = 1.11b USD
EBITDA TTM = 1.44b USD
Long Term Debt = 2.53b USD (from longTermDebt, last quarter)
Short Term Debt = 69.8m USD (from shortTermDebt, last quarter)
Debt = 3.00b USD (from shortLongTermDebtTotal, last quarter) + Leases 215.6m
Net Debt = 2.80b USD (calculated: Debt 3.00b - CCE 200.5m)
Enterprise Value = 13.2b USD (10.4b + Debt 3.00b - CCE 200.5m)
Interest Coverage Ratio = 8.99 (Ebit TTM 1.11b / Interest Expense TTM 123.2m)
EV/FCF = 28.46x (Enterprise Value 13.2b / FCF TTM 464.4m)
FCF Yield = 3.51% (FCF TTM 464.4m / Enterprise Value 13.2b)
FCF Margin = 7.66% (FCF TTM 464.4m / Revenue TTM 6.07b)
Net Margin = 10.04% (Net Income TTM 609.2m / Revenue TTM 6.07b)
Gross Margin = 58.82% ((Revenue TTM 6.07b - Cost of Revenue TTM 2.50b) / Revenue TTM)
Gross Margin QoQ = 48.44% (prev none%)
Tobins Q-Ratio = 1.81 (Enterprise Value 13.2b / Total Assets 7.31b)
Interest Expense / Debt = 4.10% (Interest Expense 123.2m / Debt 3.00b)
Taxrate = 19.54% (56.4m / 288.7m)
NOPAT = 891.1m (EBIT 1.11b * (1 - 19.54%))
Current Ratio = 1.17 (Total Current Assets 1.03b / Total Current Liabilities 876.8m)
Debt / Equity = 1.19 (Debt 3.00b / totalStockholderEquity, last quarter 2.52b)
Debt / EBITDA = 1.94 (Net Debt 2.80b / EBITDA 1.44b)
Debt / FCF = 6.04 (Net Debt 2.80b / FCF TTM 464.4m)
Total Stockholder Equity = 2.40b (last 4 quarters mean from totalStockholderEquity)
RoA = 8.73% (Net Income 609.2m / Total Assets 7.31b)
RoE = 25.35% (Net Income TTM 609.2m / Total Stockholder Equity 2.40b)
RoCE = 22.44% (EBIT 1.11b / Capital Employed (Equity 2.40b + L.T.Debt 2.53b))
RoIC = 13.76% (NOPAT 891.1m / Invested Capital 6.47b)
WACC = 7.50% (E(10.4b)/V(13.4b) * Re(8.71%) + D(3.00b)/V(13.4b) * Rd(4.10%) * (1-Tc(0.20)))
Discount Rate = 8.71% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 2.33 | Cagr: -0.40%
[DCF] Terminal Value 77.97% ; FCFF base≈433.2m ; Y1≈496.6m ; Y5≈730.9m
[DCF] Fair Price = 82.60 (EV 11.0b - Net Debt 2.80b = Equity 8.19b / Shares 99.2m; r=8.35% [WACC [floored]]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: 99.86 | EPS CAGR: 21.19% | SUE: 1.97 | # QB: 13
Revenue Correlation: 99.94 | Revenue CAGR: 11.05% | SUE: 1.14 | # QB: 1
EPS current Quarter (2026-06-30): EPS=1.48 | Chg30d=+0.26% | Revisions=-8% | Analysts=12
EPS next Quarter (2026-09-30): EPS=1.36 | Chg30d=-0.56% | Revisions=+14% | Analysts=12
EPS current Year (2026-12-31): EPS=6.01 | Chg30d=+1.55% | Revisions=+73% | GrowthEPS=+10.3% | GrowthRev=+8.2%
EPS next Year (2027-12-31): EPS=6.54 | Chg30d=+0.99% | Revisions=+47% | GrowthEPS=+8.9% | GrowthRev=+8.1%
[Analyst] Revisions Ratio: +73%