A Business at a Glance
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Encompass Health Corp
EHC
$11.5B
Mkt Cap
$112.89
+1.65%
Encompass Health Corp (EHC) has a current P/E ratio of 20.4, compared to its historical median P/E of 19.1. The stock is currently considered Fair based on its historical valuation range.
Encompass Health Corp (EHC) has a 5-year average return on invested capital (ROIC) of 11.4%. This indicates solid capital allocation.
Encompass Health Corp (EHC) has a market capitalization of $11.4B. It is classified as a large-cap stock.
Yes, Encompass Health Corp (EHC) pays a dividend with a trailing twelve-month yield of 0.65%. The company also returns capital through share buybacks, with a buyback yield of 1.74%.
Based on historical P/E analysis, Encompass Health Corp (EHC) appears fair. The current P/E of 20.4 is 7% above its historical median of 19.1. The estimated fair value CAGR (P/E method) is 10.6%.
Encompass Health Corp (EHC) operates in the Services-Hospitals industry, within the Healthcare sector.
Encompass Health Corp (EHC) reported annual revenue of $5.9 billion in its most recent fiscal year, based on SEC EDGAR filings.
Encompass Health is the nation's largest owner and operator of inpatient rehabilitation hospitals by patients treated, revenues, and number of facilities, operating 173 hospitals across 39 states and Puerto Rico with concentrations in Florida and Texas. The company provides specialized inpatient rehabilitative care for patients recovering from major injuries or illnesses, utilizing advanced technology and intensive therapy delivered by teams of nurses and therapists to help patients regain functional ability and independence; substantially all patients (92%) are admitted from acute-care hospitals following physician referrals for conditions such as strokes, hip fractures, and neurological disorders that are generally nondiscretionary in nature. The business model is built on Medicare reimbursement as the primary revenue source, supplemented by Medicare Advantage and other payors, with a focus on delivering superior patient outcomes including high discharge-to-community rates and lower lengths of stay compared to alternative post-acute settings. Growth is pursued through a multi-pronged strategy combining de novo hospital development, bed additions to existing facilities, and emerging small-format hospitals to address capacity constraints in high-occupancy markets, while operational initiatives target improved clinical outcomes, lower transfer rates, and expanded stroke market share through specialized certifications. The company generates significant free cash flow, which funds capital expenditures for capacity expansion, share repurchases, and dividends while maintaining favorable leverage, and competes on the basis of clinical quality, outcomes data, and demonstrated value to Medicare Advantage payors seeking superior discharge outcomes and cost-effective care.
【Capacity expansion driving growth】 Management expects continued strong demand for inpatient rehabilitation services driven by secular aging demographics and an underserved, widening demand-supply gap for licensed IRF beds, with the company targeting total discharge growth of 6–8% through 2027 while augmenting its traditional de novo and bed-addition approach with small-format hospitals beginning in 2027. The company plans to open seven additional hospitals with 340 beds and add 100–150 incremental beds to existing hospitals over the balance of 2026, with an active pipeline of more than 40 projects beyond announced facilities, positioning the organization to capture market share and address occupancy constraints in high-growth markets. Management anticipates the IRF final rule will be released in late July or early August 2026 and continues to focus on operational initiatives to improve discharge-to-community rates, reduce acute-care transfers, and strengthen relationships with healthcare systems and payors to connect patient care across the healthcare continuum. Free cash flow generation remains robust, supporting continued investment in growth initiatives, share repurchases, and debt reduction, with leverage expected to remain favorable as the company balances growth capital deployment with shareholder returns.
| Metric | Target | Period |
|---|---|---|
| Net operating revenue | $6.375 billion–$6.470 billion | FY2026 |
| Adjusted EBITDA | $1.35 billion–$1.38 billion | FY2026 |
| Adjusted earnings per share | $5.89–$6.11 | FY2026 |
| Net pre-opening and ramp-up costs | $18 million–$22 million | FY2026 |
Net operating revenue (FY2026): “We now expect net operating revenue of $6.375 billion-$6.470 billion”
Adjusted EBITDA (FY2026): “adjusted EBITDA of $1.35 billion-$1.38 billion”
Adjusted earnings per share (FY2026): “adjusted earnings per share of $5.89-$6.11”
Net pre-opening and ramp-up costs (FY2026): “We continue to expect net pre-opening and ramp-up cost of $18 million-$22 million for the full year 2026”
Generated solely from the company's own reports listed below — not from third-party data. Hallucination risk is low. · Sources: 10-K, Q4 FY2025 Earnings Call, Q3 FY2025 Earnings Call, Q2 FY2025 Earnings Call, Q1 FY2025 Earnings Call
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 6.1B | 5.9B | 5.4B | 4.8B | 4.3B | 4.0B |
| Net Income | 608M | 565M | 453M | 350M | 270M | 410M |
| EPS | $5.80 | $5.54 | $4.46 | $3.47 | $2.70 | $4.11 |
| Free Cash Flow | 464M | 439M | 360M | 268M | 141M | 191M |
| ROIC | 0.0% | 14.7% | 13.2% | 11.4% | 8.9% | 8.9% |
| Gross Margin | - | 29.3% | 28.1% | 28.1% | 27.7% | 30.2% |
| Debt/Equity | 1.02 | 1.11 | 1.31 | 1.78 | 2.28 | 1.82 |
| Dividends/Share | $0.73 | $0.72 | $0.64 | $0.60 | $0.86 | $1.12 |
| Operating Income | 0 | 881M | 741M | 625M | 540M | 560M |
| Operating Margin | 0.0% | 14.8% | 13.8% | 13.0% | 12.4% | 13.9% |
| ROE | 24.1% | 25.1% | 24.4% | 23.6% | 16.7% | 23.5% |
| Shares Outstanding | 101M | 102M | 102M | 101M | 100M | 100M |
| Metric | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | |||||||||||||
| Revenue | 2.4B | 3.2B | 3.6B | 3.9B | 4.3B | 4.6B | 3.6B | 4.0B | 4.3B | 4.8B | 5.4B | 5.9B | 6.1B |
| Gross Margin | 34.9% | 31.9% | 30.9% | 29.6% | 28.0% | 28.6% | 29.9% | 30.2% | 27.7% | 28.1% | 28.1% | 29.3% | N/A |
| R&D | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| SG&A | 125M | 133M | 133M | 172M | 220M | 247M | 152M | 170M | 154M | 202M | 209M | 236M | 242M |
| EBIT | 436M | 486M | 588M | 578M | 555M | 612M | 564M | 560M | 540M | 625M | 741M | 881M | 0 |
| Op. Margin | 18.1% | 15.4% | 16.1% | 14.8% | 13.0% | 13.3% | 15.8% | 13.9% | 12.4% | 13.0% | 13.8% | 14.8% | 0.0% |
| Net Income | 216M | 182M | 248M | 256M | 292M | 359M | 283M | 410M | 270M | 350M | 453M | 565M | 608M |
| Net Margin | 9.0% | 5.7% | 6.8% | 6.5% | 6.8% | 7.8% | 7.9% | 10.2% | 6.2% | 7.3% | 8.4% | 9.5% | 10.0% |
| Non-Recurring | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 4.8M | 9.8M | 17M | 2.7M | 2.7M |
| Returns on Capital | |||||||||||||
| ROIC | 13.3% | 9.3% | 10.3% | 11.1% | 11.4% | 11.7% | 9.6% | 8.9% | 8.9% | 11.4% | 13.2% | 14.7% | 0.0% |
| ROE | 52.8% | 33.5% | 36.8% | 27.1% | 24.1% | 27.3% | 19.3% | 23.5% | 16.7% | 23.6% | 24.4% | 25.1% | 24.1% |
| ROA | 7.3% | 4.5% | 5.3% | 5.4% | 5.8% | 6.4% | 4.5% | 6.2% | 4.3% | 6.0% | 7.2% | 8.3% | 8.3% |
| Cash Flow | |||||||||||||
| Op. Cash Flow | 445M | 502M | 640M | 658M | 762M | 635M | 705M | 716M | 706M | 851M | 1.0B | 1.2B | 1.2B |
| Free Cash Flow | 274M | 374M | 463M | 433M | 508M | 263M | 312M | 191M | 141M | 268M | 360M | 439M | 464M |
| Owner Earnings | 313M | 336M | 440M | 427M | 477M | 302M | 476M | 467M | 433M | 526M | 655M | 791M | 806M |
| CapEx | 171M | 128M | 178M | 226M | 255M | 372M | 393M | 525M | 565M | 583M | 643M | 736M | 736M |
| Maint. CapEx | 108M | 140M | 173M | 184M | 200M | 219M | 203M | 220M | 244M | 274M | 300M | 328M | 336M |
| Growth CapEx | 63M | 0 | 5.1M | 42M | 55M | 154M | 190M | 305M | 321M | 309M | 343M | 409M | 400M |
| D&A | 108M | 140M | 173M | 184M | 200M | 219M | 203M | 220M | 244M | 274M | 300M | 328M | 336M |
| CapEx/OCF | 38.4% | 26.5% | 28.0% | 34.3% | 33.4% | 58.6% | 56.2% | 73.3% | 82.8% | 68.5% | 64.1% | 62.6% | 61.3% |
| Capital Allocation | |||||||||||||
| Dividends Paid | 66M | 77M | 84M | 92M | 101M | 109M | 112M | 112M | 99M | 60M | 63M | 71M | 73M |
| Dividend Yield | 2.9% | 2.9% | 3.3% | 3.2% | 2.1% | 2.3% | 2.2% | 1.9% | 2.0% | 1.0% | 0.7% | 0.6% | 0.6% |
| Share Buybacks | 43M | 45M | 66M | 38M | 0 | 46M | 6.1M | 0 | 0 | 0 | 31M | 158M | 198M |
| Buyback Yield | 1.4% | 1.6% | 1.9% | 0.9% | N/A | 0.7% | 0.1% | N/A | N/A | N/A | 0.3% | 1.4% | 1.7% |
| Stock-Based Comp | 24M | 26M | 27M | 48M | 86M | 114M | 26M | 29M | 29M | 51M | 48M | 57M | 59M |
| Debt Repayment | 303M | 597M | 202M | 130M | 21M | 520M | 375M | 100M | 385M | 115M | 60M | 100M | 100M |
| Balance Sheet | |||||||||||||
| Net Debt | 2.4B | 3.2B | 3.0B | 2.5B | 2.4B | 3.3B | 3.4B | 3.4B | 3.0B | 2.9B | 2.6B | 2.6B | 2.5B |
| Cash & Equiv. | 67M | 62M | 41M | 54M | 69M | 60M | 186M | 49M | 22M | 69M | 85M | 72M | 111M |
| Long-Term Debt | 2.1B | 3.1B | 3.0B | 2.5B | 2.5B | 3.0B | 3.3B | 3.2B | 2.7B | 2.7B | 2.4B | 2.4B | 2.5B |
| Debt/Equity | 5.15 | 5.40 | 4.10 | 2.24 | 1.97 | 2.48 | 2.23 | 1.82 | 2.28 | 1.78 | 1.31 | 1.11 | 1.02 |
| Interest Coverage | 4.0 | 3.4 | 3.4 | 3.7 | 3.8 | 3.8 | 3.1 | 3.4 | 3.1 | 4.4 | 5.4 | 7.1 | 7.1 |
| Equity | 473M | 611M | 736M | 1.2B | 1.3B | 1.4B | 1.6B | 1.9B | 1.3B | 1.6B | 2.1B | 2.4B | 2.5B |
| Total Assets | 3.4B | 4.6B | 4.7B | 4.9B | 5.2B | 6.1B | 6.4B | 6.9B | 5.6B | 6.1B | 6.5B | 7.1B | 7.3B |
| Total Liabilities | 2.6B | 3.7B | 3.6B | 3.2B | 3.4B | 4.1B | 4.4B | 4.5B | 3.8B | 3.8B | 3.7B | 3.8B | 3.9B |
| Intangibles | 306M | 419M | 411M | 403M | 443M | 476M | 431M | 158M | 282M | 278M | 298M | 308M | 300M |
| Retained Earnings | -1.9B | -1.7B | -1.4B | -1.2B | -885M | -527M | -242M | 142M | 116M | 407M | 797M | 1.3B | 1.3B |
| Working Capital | 322M | 172M | 179M | 185M | -10M | 35M | 231M | 173M | 141M | 185M | 46M | 70M | 152M |
| Current Assets | 687M | 599M | 655M | 702M | 662M | 756M | 949M | 921M | 717M | 842M | 887M | 906M | 1.0B |
| Current Liabilities | 364M | 426M | 476M | 518M | 673M | 721M | 717M | 749M | 576M | 656M | 841M | 836M | 877M |
| Per Share Data | |||||||||||||
| EPS | 2.29 | 1.91 | 2.59 | 2.84 | 2.93 | 3.61 | 2.85 | 4.11 | 2.70 | 3.47 | 4.46 | 5.54 | 5.80 |
| Owner EPS | 3.33 | 3.54 | 4.60 | 4.73 | 4.78 | 3.04 | 4.79 | 4.68 | 4.33 | 5.22 | 6.45 | 7.76 | 8.01 |
| Book Value | 5.02 | 6.43 | 7.70 | 12.77 | 12.80 | 13.61 | 15.98 | 19.14 | 13.11 | 16.35 | 20.36 | 23.92 | 25.07 |
| Cash Flow/Share | 4.72 | 5.28 | 6.70 | 7.29 | 7.64 | 6.39 | 7.09 | 7.17 | 7.06 | 8.44 | 9.88 | 11.53 | 9.38 |
| Dividends/Share | 0.78 | 0.88 | 0.94 | 0.98 | 1.04 | 1.10 | 1.12 | 1.12 | 0.86 | 0.60 | 0.64 | 0.72 | 0.73 |
| Shares Out. | 94.2M | 95.0M | 95.6M | 90.2M | 99.8M | 99.4M | 99.4M | 99.9M | 99.9M | 100.7M | 101.5M | 101.9M | 100.6M |
| Valuation | |||||||||||||
| P/E Ratio | 14.6 | 15.5 | 14.1 | 15.6 | 19.1 | 17.9 | 27.3 | 12.4 | 21.2 | 19.1 | 20.8 | 19.4 | 19.4 |
| P/FCF | 9.2 | 6.0 | 6.0 | 7.4 | 8.7 | 19.5 | 19.7 | 26.5 | 40.6 | 24.9 | 26.2 | 24.9 | 24.5 |
| EV/EBIT | 165.3 | 12.6 | 11.1 | 11.8 | 14.3 | 306.4 | 18.6 | 12.3 | 15.5 | 14.8 | 16.1 | 15.1 | N/A |
| Price/Book | 6.7 | 4.6 | 4.7 | 3.7 | 4.4 | 4.8 | 4.9 | 2.7 | 4.4 | 4.1 | 4.6 | 4.5 | 4.5 |
| Price/Sales | 1.2 | 1.1 | 0.9 | 1.0 | 1.4 | 1.3 | 1.4 | 1.5 | 1.2 | 1.3 | 1.6 | 1.9 | 1.9 |
| FCF Yield | 8.7% | 13.3% | 13.2% | 10.2% | 9.1% | 4.1% | 4.0% | 3.8% | 2.5% | 4.0% | 3.8% | 4.0% | 4.1% |
| Market Cap | 3.2B | 2.8B | 3.5B | 4.2B | 5.6B | 6.4B | 7.8B | 5.1B | 5.8B | 6.7B | 9.5B | 11.0B | 11.4B |
| Avg. Price | 24.03 | 28.26 | 26.89 | 31.81 | 47.72 | 46.92 | 51.89 | 58.77 | 50.27 | 62.36 | 85.42 | 111.37 | 112.89 |
| Year-End Price | 26.68 | 23.49 | 29.06 | 35.35 | 44.49 | 51.50 | 61.89 | 50.82 | 57.30 | 66.18 | 92.83 | 107.33 | 112.89 |
Encompass Health Corp passes 5 of 9 quality checks, suggesting mixed fundamentals.
Encompass Health Corp trades at 20.4x trailing earnings, compared to its 15-year median P/E of 19.1x, suggesting it is currently Fair relative to its historical range. On a free-cash-flow basis, the stock trades at 25.6x vs a median of 22.3x. The company's 5-year average ROIC is 11.4% with a gross margin of 28.7%. Total shareholder yield (dividends + buybacks) is 2.4%. At current prices, the estimated annualized return to fair value is +1.8%.
Encompass Health Corp (EHC) has a net profit margin of 9.5%. This is a modest margin.
Encompass Health Corp (EHC) generated $439 million in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
Encompass Health Corp (EHC) has a debt-to-equity ratio of 1.11. This indicates moderate leverage.
Encompass Health Corp (EHC) reported earnings per share (EPS) of $5.54 in its most recent fiscal year.
Encompass Health Corp (EHC) has a return on equity (ROE) of 25.1%. This indicates the company generates strong returns for shareholders.
Encompass Health Corp (EHC) has a 5-year average gross margin of 28.7%. This lower margin is typical of capital-intensive or commodity businesses.
The Ledger Terminal provides 15 years of financial data for Encompass Health Corp (EHC), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
Encompass Health Corp (EHC) has a book value per share of $23.92, based on its most recent annual SEC filing.
Based on recent SEC filings and earnings disclosures, Management expects continued strong demand for inpatient rehabilitation services driven by secular aging demographics and an underserved, widening demand-supply gap for licensed IRF beds, with the company targeting total discharge growth of 6–8% through 2027 while augmenting its traditional de novo and bed-addition approach with small-format hospitals beginning in 2027. The company plans to open seven additional hospitals with 340 beds and add 100–150 incremental beds to existing hospitals over the balance of 2026, with an active pipeline of more than 40 projects beyond announced facilities, positioning the organization to capture market share and address occupancy constraints in high-growth markets. Management anticipates the IRF final rule will be released in late July or early August 2026 and continues to focus on operational initiatives to improve discharge-to-community rates, reduce acute-care transfers, and strengthen relationships with healthcare systems and payors to connect patient care across the healthcare continuum. Free cash flow generation remains robust, supporting continued investment in growth initiatives, share repurchases, and debt reduction, with leverage expected to remain favorable as the company balances growth capital deployment with shareholder returns.
Based on recent SEC filings and earnings calls, Encompass Health Corp (EHC) has provided the following forward guidance: Net operating revenue: $6.375 billion–$6.470 billion (FY2026); Adjusted EBITDA: $1.35 billion–$1.38 billion (FY2026); Adjusted earnings per share: $5.89–$6.11 (FY2026); Net pre-opening and ramp-up costs: $18 million–$22 million (FY2026).