Encompass Health (US:EHC) ZACKS·2025-12-31 19:06Core Insights - Encompass Health Corporation (EHC) is experiencing growth due to increasing patient volumes, expansion initiatives, and a strong financial position [1] Financial Performance - EHC has a Zacks Rank of 2 (Buy) and its stock has increased by 16.6% over the past year, outperforming the industry growth of 7.2% [2] - The Zacks Consensus Estimate for EHC's 2025 earnings is $5.30 per share, reflecting a year-over-year increase of 19.6%, with revenues expected to reach $5.9 billion, indicating a 10.4% growth [5] - The 2026 earnings estimate is $5.81 per share, showing a 9.6% increase from 2025 [5] - The consensus estimate for 2026 revenues is projected at $6.5 billion, representing an 8.8% growth from the 2025 estimate [6] - EHC's earnings have consistently surpassed estimates, with an average surprise of 12.47% over the last four quarters [8] Growth Drivers - EHC's revenue growth is primarily driven by an expanding patient base in its inpatient rehabilitation hospitals, with a reported 10.6% revenue increase in the first nine months of 2025 compared to the same period in the previous year [9] - The company plans to add 150-200 beds in both 2026 and 2027, supported by a robust financial foundation, including $48.7 million in cash and cash equivalents as of September 30, 2025, and $829.6 million in operating cash flows for the first nine months of 2025, a 14.6% year-over-year increase [12] Expansion Initiatives - EHC is actively launching new inpatient rehabilitation hospitals, either independently or in collaboration with healthcare partners, enhancing its service capacity and nationwide footprint [10] - As of now, EHC operates 173 hospitals across 39 states and Puerto Rico, with the latest addition being the Rehabilitation Hospital of Lake Worth, opened in December [11]