Ensign Group Shares Decline 2.2% Despite Q3 Earnings Beat

Core Insights - The Ensign Group, Inc. (ENSG) reported a 2.2% decline in shares following its third-quarter 2025 results, despite beating earnings expectations due to elevated expenses from higher service costs and administrative expenses [1][9] - Adjusted EPS for Q3 2025 was $1.64, exceeding the Zacks Consensus Estimate by 3.1%, and reflecting an 18% year-over-year improvement [2][11] - Operating revenues increased by 19.8% year over year to $1.3 billion, surpassing consensus estimates by 2.5% [2][9] Financial Performance - Adjusted net income for Q3 2025 was $96.5 million, an 18.9% increase year over year [3] - Total expenses rose by 20.9% year over year to $1.2 billion, exceeding estimates by 3.6% [3][9] - Cash and cash equivalents at the end of Q3 2025 were $443.7 million, a 4.5% decrease from the end of 2024 [6] - Total assets increased by 11.9% year over year to $5.2 billion [6] Segment Performance - Skilled Services segment revenues reached $1.2 billion, growing 19.9% year over year, driven by higher occupancy rates and patient days [4] - Rental revenues increased by 33.5% year over year to $32.6 million, supported by buyouts [5] Capital Deployment - The company did not engage in share buybacks during Q3 2025, but paid dividends totaling $10.8 million in the first nine months of 2025 [10] Outlook - The revenue forecast for 2025 has been raised to between $5.05 billion and $5.07 billion, indicating an 18.8% improvement from 2024 [11] - Adjusted EPS is projected to be between $6.48 and $6.54 for 2025, reflecting an 18.4% growth from the previous year [11]