Encompass Health EHC
United StatesHealthcare · Medical Care FacilitiesUSD
148.17 USD (+21.0%)
12 analysts
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Encompass Health Corporation is the largest operator of rehabilitation hospitals in the United States, providing post-acute care and functional recovery services to patients recovering from strokes, injuries, and major surgeries.
Key points
from its scores- ✓Favourable backdrop8.1
- ✕Little or no dividend3.7
- !Weak share-price trend5.4
AI analysis
bottom line, main risk, context and newsSolid fundamentals and stable growth in a defensive sector, although the dividend yield is scarce for income investors.
Encompass Health shows solid financial health (ND/EBITDA 1.87, operating margin 18.05%) and outstanding quality (ROE 24.97%, ROIC 20.61%), with revenue growth of 9.6% and earnings growth of 10.8%. Valuation is reasonable (P/E 20.48, PEG 0.41) and the dividend is low but with a contained payout (12.71%).
Dependence on Medicare and Medicaid reimbursements, which represent a substantial portion of revenue, exposes the company to regulatory changes in rehabilitation service reimbursement rates.
Context and risks
No relevant recent news. The macro context of rising rates in the US has a limited impact: net debt/EBITDA of 1.87 is moderate and the healthcare sector is defensive, with low sensitivity to rates and commodities.
Is Encompass Health stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades 25% below the Healthcare median on average.
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 20.5 | 26.7 | −23% |
| EV / EBITDA | 10.7 | 14.5 | −26% |
| Price / book | 4.7 | 4.1 | +13% |
| Price / sales | 1.9 | 3.4 | −43% |
Sector: median of the 217 Healthcare companies analysed. In bold, the multiples used for the comparison.
Valuation score: 6.1 out of 10 (median for Healthcare: 4.7).
Average analyst target: 148.17 USD, +21.0% versus the price.
A discount may reflect more risk or slower growth than its sector: Financial health 6.4 (sector 6.5), Growth 6.5 (sector 6.6).
Classic formulas with standard assumptions (10.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Healthcare medianValuation
- P/E
- 20.5
- Forward P/E
- 18.3
- EV / EBITDA
- 10.7
- Price / book
- 4.7
- Price / sales
- 1.9
- PEG
- 0.41
- Market cap
- 12.1B USD
- Enterprise value
- 15.7B USD
Profitability
- ROE
- 25.0%
- ROA
- 9.8%
- ROIC (approx.)
- 20.6%
- Gross margin
- 43.9%
- Operating margin
- 18.1%
- Net margin
- 10.0%
- Free cash flow
- 229.9M USD
- FCF yield
- 1.9%
- Cash conversion
- 16%
Solvency
- Total debt
- 2.8B USD
- Net debt
- 2.7B USD
- Cash
- 107.7M USD
- EBITDA
- 1.5B USD
- Net debt / EBITDA
- 1.87
- Debt / equity
- 82.12
- Current ratio
- 1.19
- Quick ratio
- 0.91
Growth
- Revenue growth
- +9.6%
- Earnings growth
- +10.8%
- EPS (TTM)
- 5.98 USD
- EPS (forward)
- 6.68 USD
Dividend
- Dividend yield
- 0.7%
- Payout
- 12.7%
Risk and market
- Beta
- 0.60
- Analyst consensus
- Strong buy (12)
- Target price
- 148.17 USD
- 52-week range
- 92.77 – 127.99
Recent news
All EHC news →Compare it with its sector
All 217 in Healthcare →Frequently asked questions about Encompass Health
Is Encompass Health stock cheap or expensive?
On P/E and EV / EBITDA, it trades 25% below the Healthcare median on average. Valuation score: 6.1 out of 10 (median for Healthcare: 4.7). Average analyst target: 148.17 USD, +21.0% versus the price. This is not investment advice.
What score does Encompass Health get on MeridIAn Screener?
It scores 6.3 out of 10, rank 716 of 2,130 (better than 63% of the companies analysed). Its strongest category is Risk & Context (8.1) and its weakest, Dividend (3.7). Analysis of 08/10/2026.
What is Encompass Health's P/E ratio?
Its P/E is 20.5: the share price equals 20.5 times earnings per share over the last 12 months. The Healthcare median is 26.7. Based on the earnings analysts expect, the forward P/E is 18.3.
How much is Encompass Health worth on the stock market?
Its market capitalisation is 12.1B USD and its enterprise value, debt included, is 15.7B USD.
How much debt does Encompass Health have?
Its net debt (debt minus cash) is 2.7B USD. That is 1.87 times its EBITDA; the Healthcare median is 1.53.
Does Encompass Health pay a dividend?
Yes: its dividend yield is 0.69% and it pays out 13% of its earnings.
How has Encompass Health stock performed over the last year?
It has risen 1.0% over the last year, excluding dividends. Over the last 52 weeks it has traded between 92.77 and 127.99 USD. Past performance does not guarantee future results.
What do analysts think of Encompass Health?
12 analysts cover it; their average recommendation is “Strong buy” and their average target is 148.17 USD (+21.0% versus the price). It is an estimate, not market data.