Shares of Encompass Health Corporation (EHC) have gained 59.9% in the past year compared with the industry’s 27.4% growth. The Medical sector and the S&P 500 composite index have returned 6.4% and 32.4%, respectively, in the same time frame. With a market capitalization of $10.4 billion, the average volume of shares traded in the last three months was 0.6 million.Improved patient volumes, an extensive healthcare facility network and strong financial health continue to propel Encompass Health's growth.The le ...

Core Viewpoint - Encompass Health reported strong third-quarter earnings, with adjusted EPS beating estimates and significant year-over-year growth in revenues and income, indicating positive operational performance and growth potential in the healthcare sector [2][5][19]. Financial Performance - Adjusted EPS for Q3 was $1.03, exceeding the Zacks Consensus Estimate by 9.6% and reflecting a 19.8% increase year over year [2]. - Net operating revenues reached $1.4 billion, marking an 11.6% year-over-year improvement and surpassing consensus estimates by 1.7% [2]. - Net and comprehensive income rose 29.7% year over year to $147.1 million [5]. - Adjusted EBITDA grew 13.4% year over year to $269.3 million, exceeding estimates [6]. Operational Highlights - Total discharges increased by 8.8% year over year to 62.7 million, outperforming growth estimates [4]. - Net patient revenue per discharge rose 2.5% year over year, although it fell short of the 3.5% growth estimate [4]. - Total operating expenses were $1.14 billion, up 11.1% year over year, primarily due to increased salaries and benefits [4]. Financial Position - As of September 30, 2024, cash and cash equivalents stood at $147.8 million, more than doubling from the end of 2023 [7]. - Total assets increased by 5.8% to $6.5 billion, while long-term debt decreased by 12.8% to $2.7 billion [8]. - Total shareholders' equity improved by 18.4% to $2.7 billion [9]. Capital Deployment - The company repurchased shares worth $23.6 million in the first nine months of 2024, with a remaining buyback capacity of approximately $498 million [10]. - A quarterly cash dividend of 17 cents per share was paid [11]. 2024 Outlook - Net operating revenues are projected to be between $5.325 billion and $5.375 billion, reflecting an 11.4% increase from 2023 [13]. - Adjusted EBITDA is expected to range from $1.07 billion to $1.09 billion, indicating an 11.2% growth from the previous year [13]. - Adjusted EPS is anticipated to be between $4.19 and $4.33, representing a 17% rise from 2023 [14]. - The company plans to open six de novo hospitals and add approximately 110 beds to existing facilities in 2024 [15]. Growth Strategy - Encompass Health aims to inaugurate six to ten de novo hospitals annually and add 80-120 beds each year from 2023 to 2027, targeting a CAGR of 6-8% in discharges during this period [16]. Market Position - Encompass Health holds a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [19].

Core Insights - The article compares two stocks in the Medical - Outpatient and Home Healthcare sector: Encompass Health (EHC) and Chemed (CHE), evaluating which stock offers better value for investors [1]. Valuation Metrics - EHC has a forward P/E ratio of 23.64, while CHE has a forward P/E of 24.73 [5]. - EHC's PEG ratio is 1.34, indicating a more favorable valuation compared to CHE's PEG ratio of 2.25 [5]. - EHC's P/B ratio is 3.82, significantly lower than CHE's P/B of 6.95, suggesting EHC is more undervalued relative to its book value [6]. Investment Ratings - EHC currently holds a Zacks Rank of 2 (Buy), while CHE has a Zacks Rank of 4 (Sell), indicating a more positive analyst outlook for EHC [3]. - Based on various valuation metrics, EHC has a Value grade of A, whereas CHE has a Value grade of C, further supporting the conclusion that EHC is the more attractive investment option [7].

A Shared Vision Encompass Health and BLOX began working together in the early 2000s with a shared vision to build higher quality and more cost-efficient hospitals. Initially, BLOX manufactured bathroom pods off-site in an assembly line format at their facility in Bessemer, Alabama for installation at new Encompass Health hospitals. Since that time, both companies have grown rapidly, and BLOX has progressed from producing bathrooms to headwall modules and patient rooms, to a fully prefabricated hospital. BLO ...

Investors interested in Medical - Outpatient and Home Healthcare stocks are likely familiar with Encompass Health (EHC) and Astrana Health, Inc. (ASTH) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts ...

Company Overview - Encompass Health Corporation is a provider of integrated healthcare services, operating a network of 162 inpatient rehabilitation hospitals across 37 states and Puerto Rico [10] - The company focuses on delivering high-quality, cost-effective, integrated care, which is increasingly important in the context of coordinated care and integrated delivery payment models [10] Investment Ratings - Encompass Health is rated 2 (Buy) on the Zacks Rank, indicating a positive outlook for the stock [11] - The company has a VGM Score of A, reflecting strong performance across value, growth, and momentum metrics [11] Financial Metrics - Encompass Health has a Value Style Score of A, supported by a forward P/E ratio of 23.49, making it attractive to value investors [11] - The Zacks Consensus Estimate for fiscal 2024 earnings per share has increased by $0.09 to $4.27, with eight analysts revising their earnings estimates upwards in the last 60 days [11] - The company has demonstrated an average earnings surprise of 13.6%, indicating strong performance relative to expectations [11] Investment Considerations - With a solid Zacks Rank and top-tier Value and VGM Style Scores, Encompass Health is positioned as a compelling option for investors [12]

BIRMINGHAM, Ala. and WESLEY CHAPEL, Fla., Nov. 4, 2024 /PRNewswire/ -- Encompass Health Corp. (NYSE: EHC) today announced preliminary plans to build a freestanding, 50-bed inpatient rehabilitation hospital in the master planned community of Wiregrass Ranch in Wesley Chapel, Florida.The hospital will serve patients recovering from debilitating illnesses and injuries, including strokes and other neurological disorders, brain injuries, spinal cord injuries, amputations and complex orthopedic conditions. In add ...

Shares of Encompass Health Corporation (EHC) gained 6.3% since it reported third-quarter 2024 results on Oct. 28. Strong quarterly results benefited from strong discharges, higher net revenue per discharge, and impressive growth-related initiatives. However, a rise in operating expenses, particularly in salaries and benefits, acted as a partial offset.EHC reported third-quarter adjusted earnings per share (EPS) of $1.03, which beat the Zacks Consensus Estimate by 9.6%. The bottom line increased 19.8% year o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ______________________________ Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share EHC New York Stock Exchange FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Num ...

Financial Data and Key Metrics Changes - Revenue increased by 11.9% to $1.35 billion and adjusted EBITDA increased by 13.4% to $269.3 million in Q3 2024 [10][22] - Total discharges increased by 8.8%, with net revenue per discharge increasing by 2.5% [22] - Bad debt expense as a percentage of revenue decreased to 1.9%, down 30 basis points from Q3 2023 and 100 basis points from Q2 2024 [23][24] - Adjusted free cash flow increased by 27.1% to $189.7 million, with a year-to-date total of approximately $0.5 billion [33] Business Line Data and Key Metrics Changes - Discharge growth was broad-based across geographies, payers, and patient types, with neurological and stroke conditions growing by 9% and 9.7% respectively [11] - Medicare discharges increased by 8.8% for the quarter, while Medicare Advantage discharges grew by 12.6% [11][67] Market Data and Key Metrics Changes - The demand for inpatient rehabilitation care is underserved and growing, with the age cohort most in need of these services expected to grow at a 4% to 5% CAGR [12] - By 2030, it is estimated that one in five Americans, over 70 million people, will be aged 65 or older, driving strong demand for inpatient rehabilitation services [12] Company Strategy and Development Direction - The company is continuing to invest in capacity additions, having added 99 beds during Q3, including two de novo hospitals [14] - The Houston project represents a milestone in the company's de novo construction strategy, utilizing full prefabrication to lower costs and shorten construction times [15] - The company anticipates building at least two de novos per annum with full prefabrication, with a robust pipeline of 15 development projects beyond 2024 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the updated guidance for 2024, anticipating net operating revenue of $5.325 billion to $5.375 billion and adjusted EBITDA of $1.07 billion to $1.09 billion [35] - The company is aware of potential impacts from community recovery post-hurricanes, which may affect volumes and length of stay in Q4 [21] Other Important Information - The company has a favorable leverage and liquidity position, with net leverage at 2.3 times compared to 2.7 times at year-end 2023 [34] - The company issued a notice of redemption for an incremental $100 million of its senior notes due in September 2025 [35] Q&A Session Summary Question: What drove the strong same-store volumes? - Management noted broad growth across all geographic regions and the ramp-up of facilities opened in previous years, contributing to market share gains [41][42] Question: Should FTE growth continue to increase? - Management indicated that total FTE growth is expected to correlate with discharge growth, stabilizing around 3.4% [44][45] Question: What is the estimated revenue impact from lower volumes due to hurricanes? - Management stated that the impact would be minor as hospitals resumed normal operations quickly, but they are evaluating potential longer lengths of stay due to community healthcare system disruptions [47] Question: Are there any expected delays in construction due to hurricanes? - Management confirmed that there are no expected delays for the hospitals scheduled to open in Florida next year, as the sites were secured in advance of the storms [49] Question: What are the key headwinds and tailwinds for 2025? - Management highlighted expected SWB per FTE inflation of 3% to 3.5% and noted uncertainty regarding provider tax contributions due to variability across states [58] Question: What is the company's exposure to election-related programs? - Management indicated that the Tennessee program is not a significant factor for the company, and historically, election outcomes have not had a major impact on operations [70][71]