Core Viewpoint - Enhabit (EHAB) reported quarterly earnings of $0.10 per share, exceeding the Zacks Consensus Estimate of $0.07 per share, marking a 42.86% earnings surprise compared to the previous year's earnings of $0.07 per share [1] Financial Performance - Enhabit posted revenues of $259.9 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.56% and down from $262.4 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times [2] Stock Performance - Enhabit shares have increased by approximately 2.9% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $267.14 million, and for the current fiscal year, it is $0.37 on revenues of $1.07 billion [7] - The estimate revisions trend for Enhabit is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Medical Services industry, to which Enhabit belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Financial Performance - Net service revenue for Q1 2025 was $259.9 million, a decrease of 1.0% compared to Q1 2024's $262.4 million[6] - Net income attributable to Enhabit, Inc. was $17.8 million, significantly up from $0.2 million in Q1 2024, representing an increase of 8,800.0%[6] - Adjusted EBITDA for Q1 2025 was $26.6 million, reflecting a year-over-year growth of 5.1%[7] - Hospice net service revenue rose to $59.3 million, a 20.5% increase from $49.2 million in Q1 2024[10] - Net income for Q1 2025 was $18.4 million, a significant increase from $0.9 million in Q1 2024, representing a growth of over 1,955%[23] - Adjusted EBITDA for Q1 2025 was $26.6 million, compared to $25.3 million in Q1 2024, reflecting a year-over-year increase of 5.1%[33] - The company reported a diluted earnings per share of $0.35 for Q1 2025, a substantial increase from $0.01 in Q1 2024[25] Admissions and Growth - Home health non-Medicare admissions increased by 7.4% year over year, while total admissions grew by 0.7%[5] - Hospice Adjusted EBITDA surged by 64.8% year over year, reaching $15.0 million[10] Debt and Financial Position - The company reduced bank debt by $25.0 million in the quarter, totaling a $60.0 million reduction year over year[7] - The leverage ratio improved to below 4.5 times, allowing the company to exit the covenant relief period restrictions[2] - Principal payments on debt totaled $25.0 million in Q1 2025, compared to $5.0 million in Q1 2024, indicating a significant increase in debt repayment[23] Guidance and Projections - Full-year 2025 guidance for net service revenue is projected between $1,050 million and $1,080 million, compared to $1,034.8 million in 2024[11] - Adjusted diluted earnings per share for 2025 is guided to be between $0.41 and $0.51, up from $0.21 in 2024[11] Assets and Equity - Total assets as of March 31, 2025, were $1,235.9 million, up from $1,226.0 million as of December 31, 2024, indicating a growth of 0.2%[21] - Cash and cash equivalents increased to $39.5 million in Q1 2025 from $28.4 million in Q4 2024, marking a rise of 39.2%[21] - Total stockholders' equity rose to $568.3 million as of March 31, 2025, compared to $548.9 million at the end of 2024, an increase of 3.1%[21] Cash Flow and Expenses - Cash flows from operating activities provided $17.9 million in Q1 2025, slightly higher than $17.3 million in Q1 2024[23] - Net cash provided by operating activities increased to $17.9 million in Q1 2025 from $17.3 million in Q1 2024, representing a growth of 3.5%[34] - Adjusted free cash flow decreased to $16.9 million in Q1 2025 from $18.6 million in Q1 2024, a decline of 9.1%[35] - General and administrative expenses as a percentage of revenue were 41.4% in Q1 2025, slightly up from 41.0% in Q1 2024[37] Margins and Unusual Items - Gross margin as a percentage of revenue improved to 49.9% in Q1 2025 compared to 48.9% in Q1 2024, indicating a 1.0 percentage point increase[37] - Adjusted EBITDA margin increased to 10.2% in Q1 2025 from 9.6% in Q1 2024, showing a growth of 0.6 percentage points[37] - Unusual or nonrecurring items in Q1 2025 amounted to $1.0 million, down from $3.7 million in Q1 2024, a reduction of 73.0%[35] Strategic Focus - The company plans to continue focusing on restructuring activities and addressing nonrecurring litigation costs as part of its ongoing strategy[33] - The company is focused on integrating technology into operations and successfully completing acquisitions and joint ventures as part of its growth strategy[38] - The company anticipates future financial performance to be influenced by strategic plans, regulatory developments, and economic conditions, with no specific guidance provided[38]

Group 1 - Enhabit (EHAB) is a notable stock in the Medical sector, currently ranked 4 in the Zacks Sector Rank, which evaluates 1003 companies across 16 sector groups [2] - The Zacks Rank system focuses on earnings estimates and revisions, with Enhabit holding a Zacks Rank of 2 (Buy), indicating a positive earnings outlook as the consensus estimate for its full-year earnings has increased by 32.1% over the past three months [3] - Year-to-date, Enhabit has returned approximately 2.8%, outperforming the Medical sector average return of -4.9% [4] Group 2 - Enhabit is part of the Medical Services industry, which includes 58 stocks and currently ranks 84 in the Zacks Industry Rank, with an average return of 0.2% this year, indicating that EHAB is performing better than its peers [5] - Another stock in the Medical sector, Doximity (DOCS), has also shown strong performance with a year-to-date return of 4.1% and a Zacks Rank of 2 (Buy) [4][5] - Investors in the Medical sector should monitor both Enhabit and Doximity for their continued solid performance [6]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum if future growth does not justify high valuations [1] - Identifying the right entry point for fast-moving stocks is challenging, and traditional momentum parameters may not always be reliable [1] Group 2: Bargain Stocks and Screening - Investing in bargain stocks with recent price momentum may be safer, and the Zacks Momentum Style Score is useful for identifying such stocks [2] - The 'Fast-Paced Momentum at a Bargain' screen helps in spotting fast-moving stocks that are still attractively priced [2] Group 3: Enhabit (EHAB) Stock Analysis - Enhabit (EHAB) has shown a price increase of 7% over the past four weeks, indicating growing investor interest [3] - EHAB gained 13.2% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.8, indicating it moves 80% higher than the market in either direction [4] Group 4: Valuation and Earnings Estimates - EHAB has a Momentum Score of A, suggesting it is an opportune time to invest [5] - The stock has a Zacks Rank 2 (Buy) due to upward trends in earnings estimate revisions, which attract more investors [6] - EHAB is trading at a Price-to-Sales ratio of 0.43, indicating it is relatively cheap at 43 cents for each dollar of sales [6] Group 5: Additional Investment Opportunities - Besides EHAB, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen [7] - Zacks offers over 45 Premium Screens tailored to different investing styles to help identify winning stock picks [8]

Core Viewpoint - Enhabit (EHAB) is showing solid improvement in earnings estimates, which may lead to continued short-term price momentum and a positive earnings outlook [1][2]. Estimate Revisions - The upward trend in earnings estimate revisions reflects growing analyst optimism regarding Enhabit's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, the earnings estimate is $0.07 per share, unchanged from the previous year, with a Zacks Consensus Estimate increase of 18.18% over the last 30 days due to one upward revision [4]. - For the full year, Enhabit is expected to earn $0.37 per share, representing a 76.19% increase from the prior year, with a 26.14% increase in consensus estimates driven by three upward revisions [5]. Zacks Rank - Enhabit currently holds a Zacks Rank 2 (Buy), indicating promising estimate revisions and a strong potential for outperformance compared to the S&P 500 [6]. - The Zacks Rank system has a proven track record, with Zacks 1 (Strong Buy) stocks averaging a +25% annual return since 2008 [3]. Stock Performance - Enhabit has experienced a 6.4% gain over the past four weeks, driven by solid estimate revisions, suggesting that its earnings growth prospects may lead to further stock price increases [7].

Financial Data and Key Metrics Changes - Consolidated net revenue for Q4 was $258.2 million, reflecting a sequential increase of $4.6 million or 1.8% quarter over quarter, but a decrease of $2.4 million or 0.9% year over year [27] - Consolidated adjusted EBITDA for Q4 was $25.1 million, an increase of $0.6 million or 2.4% sequentially, remaining relatively flat year over year [28] - Home Health revenue decreased by $0.6 million or 0.3% sequentially, while hospice revenue increased by $5.2 million or 9.9% sequentially [31][36] Business Line Data and Key Metrics Changes - Home Health admissions grew by 1.8% year over year, with non-Medicare admissions up 10.7% [7] - Hospice average daily census (ADC) increased by 8.6% year over year, with same-store up 7% [17] - Home Health adjusted EBITDA totaled $35.5 million in Q4, reflecting a sequential decrease of $1.0 million or 2.7% [32] Market Data and Key Metrics Changes - 72% of Home Health census is now in episodic payers, indicating a shift towards a more favorable payer mix [30] - Hospice ADC of 3,729 is 3.9% higher than the previous post-spin segment peak in Q4 of 2022 [38] Company Strategy and Development Direction - The company is focused on executing growth strategies in both Home Health and Hospice segments, with a strong emphasis on census growth and payer innovation contracts [6][19] - A de novo strategy was implemented, successfully opening six new locations in 2024, with plans for fourteen more projects in process [20] - The company aims to optimize its cost structure by closing or consolidating branches, expecting to improve adjusted EBITDA by approximately $1 million [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to maintain growth momentum into 2025, particularly in hospice operations [55] - The company anticipates a foundational year in 2024 to set the stage for consistent census growth and improved payer mix [46] - Management highlighted the importance of managing visits per episode to maintain high-quality outcomes while increasing clinical capacity [12] Other Important Information - The company generated approximately $54 million of adjusted free cash flow during 2024, with a conversion rate of approximately 54% [42] - 2025 guidance for net service revenue is projected between $1.05 billion to $1.08 billion, with adjusted EBITDA in the range of $101 million to $107 million [43] Q&A Session Summary Question: How does the momentum in Q4 carry over into 2025? - Management is confident in the case management model and the business development team's ability to convert referrals quickly, expecting continued sequential growth [60] Question: What visibility exists regarding payer innovation contracts? - Management noted ongoing discussions with regional plans on episodic contracts, indicating a renewed interest in moving towards episodic arrangements [64] Question: How do the new opportunities and historical agreements relate to guidance? - The guidance includes an expectation of $19 to $21 million in overall revenue improvement based on pricing, without assuming material incremental unit revenues from payer innovation [70] Question: Can you break down the components of hospice revenue per day? - The hospice cap accrual benefit was about $1.4 million, and normalizing for that shows consistency with expected Medicare rate increases [72]

Financial Data and Key Metrics Changes - In Q4 2024, consolidated net revenue was $258.2 million, a sequential increase of $4.6 million or 1.8% quarter over quarter, but a decrease of $2.4 million or 0.9% year over year [27] - Consolidated adjusted EBITDA for Q4 was $25.1 million, reflecting a sequential increase of $0.6 million or 2.4%, while remaining relatively flat year over year [28] - Home Health revenue was $200.4 million, a decrease of $0.6 million or 0.3% sequentially, primarily due to hurricane-related impacts [31] - Hospice revenue increased to $57.8 million, a sequential increase of $5.2 million or 9.9% [36] Business Line Data and Key Metrics Changes - Home Health admissions grew by 1.8% year over year, with non-Medicare admissions up 10.7% [7] - Hospice average daily census (ADC) increased by 8.6% year over year, with total admissions growing by 6.5% [17] - The percentage of home health visits in payer innovation contracts rose from 22% in Q4 2023 to 48% in Q4 2024 [11] Market Data and Key Metrics Changes - The Medicare ADC improved sequentially to 20,818 in Q4, with current Medicare ADC above 20,000 in Q1 2025 [34] - Hospice ADC of 3,729 in Q4 was 3.9% higher than the previous post-spin segment peak in Q4 2022 [38] Company Strategy and Development Direction - The company is focused on executing growth strategies in both home health and hospice segments, with a strong emphasis on payer innovation and operational efficiency [6][19] - A de novo strategy was implemented, successfully opening six new locations in 2024, with plans for fourteen more projects in process [20] - The company aims to optimize its cost structure by closing or consolidating branches, expecting to improve adjusted EBITDA by approximately $1 million [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the hospice segment's growth momentum and the effectiveness of the case management model implemented in 2023 [56] - The company anticipates a foundational year in 2024 to set the stage for consistent census growth and improved payer mix in 2025 [46] - Guidance for 2025 includes net service revenue of $1.05 billion to $1.08 billion and adjusted EBITDA of $101 million to $107 million, reflecting approximately 7% growth at the upper end [43] Other Important Information - The company generated approximately $54 million of adjusted free cash flow in 2024, with a conversion rate of approximately 54% [42] - The company plans to reduce leverage through 2025, having already reduced outstanding debt by approximately $40 million in 2024 [41] Q&A Session Summary Question: How does the momentum in Q4 carry over into 2025, especially with the business development team built out? - Management is confident in the hospice segment's growth due to the fully implemented case management model and the establishment of admission departments to improve referral conversion [60] Question: What visibility exists regarding payer innovation contracts and the potential to convert non-payer innovation contracts into better-paying deals? - Management noted ongoing discussions with regional plans on episodic contracts, indicating a renewed interest in moving towards episodic arrangements [64] Question: How do the new opportunities and historical agreements relate to the 2025 guidance? - The guidance includes an expectation of $19 million to $21 million in overall revenue improvement based on pricing, without assuming material incremental unit revenues from payer innovation [70] Question: Can you break down the components of hospice revenue per day increase? - The hospice cap accrual benefit was about $1.4 million, and normalizing for that shows consistency with expected Medicare rate increases [72]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ________ Commission file number 001-41406 Enhabit, Inc. (Exact name of Registrant as specified in its charter) Delaware 47-2409192 (State or other jurisdiction o ...

Core Insights - Enhabit reported quarterly earnings of $0.04 per share, missing the Zacks Consensus Estimate of $0.05 per share, and down from $0.06 per share a year ago, representing an earnings surprise of -20% [1] - The company posted revenues of $258.2 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.37%, and down from $260.6 million year-over-year [2] - Enhabit has surpassed consensus EPS estimates two times over the last four quarters, but has not beaten consensus revenue estimates during the same period [2] Future Outlook - The immediate price movement of Enhabit shares will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $266.6 million, and for the current fiscal year, it is $0.29 on revenues of $1.07 billion [7] - The estimate revisions trend for Enhabit is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance against the market [6] Industry Context - The Medical Services industry, to which Enhabit belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net service revenue for Q4 2024 was $258.2 million, a decrease of 0.9% compared to Q4 2023[5] - The net loss attributable to Enhabit, Inc. was $46.0 million, representing a significant increase of 618.8% from a loss of $6.4 million in Q4 2023[6] - Adjusted EBITDA for Q4 2024 was $25.1 million, a slight decrease of 0.4% from $25.2 million in Q4 2023[6] - The net loss attributable to Enhabit, Inc. for the year ended December 31, 2024, was $156.2 million, compared to a net loss of $80.5 million in 2023, representing a 94.2% increase in losses[18] - The company reported a basic loss per share of $3.11 for the year 2024, compared to $1.61 in 2023, indicating a 93.2% increase in loss per share[24] - Adjusted diluted earnings per share for Q4 2024 was $0.04, compared to $0.06 in Q4 2023[24] - For the year ended December 31, 2024, Adjusted EBITDA was $100.1 million, compared to $97.6 million for 2023, reflecting a 2.6% increase[30] - Adjusted diluted EPS for the year ended December 31, 2024, was $0.21, compared to $0.22 in 2023[30] Revenue and Admissions - Home health non-Medicare admissions increased by 10.7%, contributing to a total admissions growth of 1.8% year over year[5] - Hospice average daily census rose by 8.6% year over year, with sequential increases every month since January 2024[5] - Hospice net service revenue increased by 13.1% year over year, with adjusted EBITDA rising by 13.7%[5] - Net service revenue for Q4 2024 was $258.2 million, a decrease of 1% from $260.6 million in Q4 2023[18] - Full-year 2025 guidance for net service revenue is projected between $1,050 million and $1,080 million[11] Expenses and Liabilities - Home health cost per patient day increased approximately 1% year over year, while hospice cost per patient day rose by 5.7%[5] - Goodwill impairment for the year was $161.7 million, significantly higher than the $85.8 million recorded in 2023[18] - Total assets decreased to $1,226.0 million in 2024 from $1,433.6 million in 2023, reflecting a decline of 14.5%[20] - Total liabilities decreased to $672.1 million in 2024 from $731.9 million in 2023, a reduction of 8.1%[20] - Interest expense for the year ended December 31, 2024, was $42.9 million, consistent with $43.0 million in 2023[38] Cash Flow and Financial Health - Cash and cash equivalents at the end of 2024 were $30.3 million, up from $29.8 million at the end of 2023[21] - The company experienced a net cash provided by operating activities of $51.2 million for the year 2024, slightly up from $48.4 million in 2023[21] - Adjusted free cash flow for the year ended December 31, 2024, was $53.5 million, a decrease from $58.8 million in 2023[39] - Net cash provided by operating activities for the three months ended December 31, 2024, was $(4.1) million, compared to $2.8 million in the same period of 2023[39] Operational Metrics - Operating loss for Q4 2024 was $(41.2) million, a significant decline from an operating income of $4.9 million in Q4 2023[18] - Gross margin as a percentage of revenue for the three months ended December 31, 2024, was 48.5%, slightly down from 48.8% in 2023[41] - General and administrative expenses as a percentage of revenue improved to (40.5)% in Q4 2024 from (43.9)% in Q4 2023[41] - Adjusted EBITDA margin for the year ended December 31, 2024, was 9.7%, an increase from 9.3% in 2023[41] Strategic Outlook and Risks - The company anticipates potential disruptions or breaches of information systems as a risk factor affecting future performance[42] - Future financial performance projections are subject to various risks, including regulatory developments and changes in reimbursement rates[42] - The strategic review process concluded in May 2024, which may impact future operational strategies[39] - The company is focused on successfully completing and integrating de novo locations, acquisitions, and joint ventures as part of its growth strategy[42]