Encompass Health Corporation
- Open
- 101.32
- Day high
- 102.58
- Day low
- 100.80
- Prev close
- 101.08
- Volume
- 151K
- Mkt cap
- $10.1B
- P/E (TTM)
- 16.8
- EPS (TTM)
- $6.08
- P/B
- 4.0
- P/S
- 1.7
- Yield
- 0.75%
- Per share
- $0.76
- ▼Insiders net selling -$3.0M over the last 3 months (0 open-market buys, 3 sales)
- 🏛Institutions mixed (13F)
Encompass Health Corporation (EHC) is a Healthcare company listed on NYSE. The stock is down 16% over the past year. Over the trailing 3 months, insiders filed 0 open-market buys and 3 sales (SEC Form 4).
Encompass Health Corporation (EHC) financials & analyst ratings
Fundamentals (TTM)
Analyst consensus · 2 analysts
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
EHC earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| May 1, 2026 | $1.51 | $1.60 | +6.0% | $1.6B | +1.2% |
| Feb 5, 2026 | $1.29 | $1.46 | +13.2% | $1.5B | -2.5% |
| Oct 29, 2025 | $1.19 | $1.23 | +3.4% | $1.5B | -4.1% |
| Apr 24, 2025 | $1.19 | $1.37 | +15.1% | $1.5B | +2.1% |
| Feb 6, 2025 | $1.05 | $1.17 | +11.4% | $1.4B | +1.7% |
| Feb 7, 2024 | $0.82 | $0.95 | +15.9% | $1.2B | +0.8% |
| Oct 26, 2023 | $0.77 | $0.86 | +11.7% | $1.2B | +1.1% |
| Aug 1, 2023 | $0.75 | $0.95 | +26.7% | $1.2B | +2.3% |
| Apr 27, 2023 | $0.70 | $0.88 | +25.7% | $1.2B | +0.1% |
| Feb 7, 2023 | $0.83 | $0.88 | +6.0% | $1.1B | +1.4% |
| Oct 26, 2022 | $0.64 | $0.67 | +4.7% | $1.1B | +2.3% |
| Feb 1, 2022 | $1.05 | $0.97 | -7.6% | $1.3B | +1.0% |
EHC insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| May 18, 2026 | COLTHARP DOUGLAS Eofficer: EVP & Chief Financial Officer | Sell | 1 | $107.28 |
| May 18, 2026 | COLTHARP DOUGLAS Eofficer: EVP & Chief Financial Officer | Sell | 27,693 | $106.83 |
| May 18, 2026 | COLTHARP DOUGLAS Eofficer: EVP & Chief Financial Officer | Option | 27,694 | $32.94 |
| May 12, 2026 | Tuer Patrick Williamofficer: EVP, Chief Operating Officer | Sell | 682 | $104.56 |
| May 11, 2026 | O'Connor Kevin J.director | Grant | 1,634 | — |
| May 11, 2026 | Reidy Christopher Rdirector | Grant | 1,634 | — |
| May 11, 2026 | HERMAN JOAN Edirector | Grant | 1,634 | — |
| May 11, 2026 | Christie Edward M IIIdirector | Grant | 1,634 | — |
| May 11, 2026 | Hayes Cain Adirector | Grant | 1,634 | — |
| May 11, 2026 | SCHLICHTING NANCY Mdirector | Grant | 1,634 | — |
| May 11, 2026 | Williams Terrancedirector | Grant | 1,634 | — |
| May 11, 2026 | CARMICHAEL GREG Ddirector | Grant | 1,634 | — |
| May 11, 2026 | KATZ LESLYE Gdirector | Grant | 1,634 | — |
| Apr 16, 2026 | Christie Edward M IIIdirector | Grant | 9 | — |
| Apr 16, 2026 | Reidy Christopher Rdirector | Grant | 19 | — |
Source: EHC SEC Form 4 filings, latest May 18, 2026. For informational purposes only — not investment advice.
See the full EHC insider & 13F page →Encompass Health Corporation company profile
Overview
Encompass Health Corporation (NYSE:EHC) is a leading provider of post-acute healthcare services in the United States, founded in 1983 and originally known as HealthSouth Corporation until rebranding in January 2018. Based in Birmingham, Alabama, the company has evolved from its origins to become the nation's largest owner and operator of inpatient rehabilitation hospitals. Encompass Health went public in 1986 and has grown through both organic expansion and strategic acquisitions to operate 149 hospitals across 42 states and Puerto Rico, serving patients recovering from serious injuries, illnesses, and chronic conditions that require specialized rehabilitative care.
Business
Encompass Health operates primarily in the post-acute care segment of the healthcare industry, which serves as a critical bridge between intensive hospital treatment and patients' return to independent living. The company focuses on inpatient rehabilitation facilities (IRFs), which are specialized hospitals that provide intensive, coordinated rehabilitation services to patients recovering from debilitating conditions. The company's core service offering centers around inpatient rehabilitation, where patients typically stay for 12-14 days receiving intensive therapy from multidisciplinary teams including physicians, nurses, physical therapists, occupational therapists, speech-language pathologists, and other specialists. These facilities treat patients recovering from strokes, brain and spinal cord injuries, complex orthopedic conditions, cardiac and pulmonary conditions, neurological disorders, and amputations. The rehabilitation process is highly structured, requiring patients to participate in at least three hours of therapy per day, five days per week. Until July 2022, Encompass Health also operated a Home Health and Hospice segment, which provided Medicare-certified home nursing services, therapy services, and end-of-life care. However, this segment was spun off as a separate public company called Enhabit, allowing Encompass Health to focus exclusively on its core inpatient rehabilitation business, which now represents virtually 100% of its revenue base. The inpatient rehabilitation industry serves a specific niche in healthcare, positioned between acute care hospitals (where patients receive initial emergency or surgical treatment) and lower-acuity settings like skilled nursing facilities or outpatient therapy. IRFs are distinguished by their ability to handle medically complex patients who require physician oversight and intensive rehabilitation but are stable enough to participate in rigorous therapy programs.
Revenue model
Encompass Health generates revenue primarily through facility-based healthcare services, operating under a fee-for-service model where the company is reimbursed by various payers for each patient admission and the associated care provided. The company's revenue streams come from multiple payer sources, with Medicare representing the largest portion, followed by Medicare Advantage plans, commercial insurance, and Medicaid. The business model relies on per-discharge reimbursement, where payment rates are typically predetermined based on the patient's diagnosis and severity of condition. Medicare payments follow the Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS), which sets fixed payment amounts based on patient classification. Medicare Advantage plans often operate under similar case-rate structures, while commercial payers may negotiate higher reimbursement rates. Key factors that increase profitability include higher patient volumes (economies of scale), favorable payer mix (more commercial and Medicare Advantage patients versus traditional Medicare), efficient length of stay management, and operational leverage from fixed costs. The company benefits from demographic tailwinds as the aging baby boomer population increases demand for rehabilitation services. Margin pressures come from several sources: labor cost inflation (particularly nursing and therapy staff shortages requiring premium contract labor), regulatory changes affecting reimbursement rates, prior authorization requirements from Medicare Advantage plans that can delay or deny admissions, and competition from alternative care settings like skilled nursing facilities or outpatient therapy providers. The company has worked to mitigate these pressures by reducing reliance on expensive contract labor, expanding capacity in high-demand markets, and demonstrating superior clinical outcomes to justify premium reimbursement rates.
Competitive moat
Encompass Health possesses a moderate but defensible competitive moat built on several key advantages. The company benefits from significant regulatory barriers to entry, as inpatient rehabilitation facilities require specialized Medicare certification, state licensing, and must meet strict staffing and operational requirements that create high hurdles for new competitors. The IRF designation itself is valuable, as these facilities can treat higher-acuity patients and receive higher reimbursement rates compared to skilled nursing facilities. The company has established strong referral relationships with acute care hospitals, which serve as the primary source of patient admissions. These relationships are built over years and are reinforced by Encompass Health's track record of accepting complex patients and delivering superior clinical outcomes, including high discharge-to-community rates (84%) and low readmission rates. The company's scale advantages allow it to invest in specialized equipment, technology, and clinical programs that smaller competitors cannot match. Geographic market concentration provides additional defensive characteristics, as Encompass Health often operates the only IRF in smaller metropolitan areas, creating local monopolies. The company's size also enables it to negotiate more effectively with payers and spread fixed costs across a larger patient base. However, the moat faces challenges from alternative care settings that are expanding their capabilities, including skilled nursing facilities offering rehabilitation services and the growth of outpatient therapy options. Medicare Advantage plans are increasingly using prior authorization and care management to steer patients toward lower-cost alternatives. Additionally, labor shortages in healthcare create ongoing operational challenges that could erode margins if not effectively managed. The regulatory environment also poses risks, as changes to Medicare reimbursement methodologies or quality metrics could impact profitability.
Risks & safety
Encompass Health demonstrates a reasonable margin of safety with stable cash generation and manageable debt levels, though working capital remains tight. **Financial Stability:** - Current ratio of 1.06 indicates tight but adequate liquidity - Debt-to-equity ratio of 1.25 represents moderate leverage - Strong operating cash flow of $289 million in Q1 2025 - Free cash flow of $126 million provides cushion for operations **Valuation Metrics:** - P/E ratio of 16.8 appears reasonable for a healthcare services company - EV/EBITDA of 9.1 suggests modest valuation relative to cash generation - Price-to-book ratio of 4.7 reflects asset-heavy business model typical of hospital operators **Other Considerations:** - Minimal cash position ($96 million) requires careful working capital management - Consistent EBITDA growth and margin expansion demonstrate operational leverage - Demographic tailwinds provide long-term demand visibility - Regulatory dependency on Medicare reimbursement creates policy risk
Recent development
Over the past few years, Encompass Health has executed a focused capacity expansion strategy while streamlining its business model. The most significant strategic move was the spin-off of the Home Health and Hospice segment in July 2022, creating Enhabit as a separate public company and allowing Encompass Health to concentrate exclusively on inpatient rehabilitation facilities. The company has aggressively expanded its IRF footprint, opening 8-9 de novo hospitals annually and adding hundreds of beds to existing facilities. Notable expansion includes significant growth in Florida with 5 new hospitals planned for 2025, and strategic joint ventures such as the partnership expansion with Piedmont Healthcare. The company has innovated its construction approach through prefabrication strategies, which reduce construction time and costs by approximately 15% while maintaining quality standards. Operational improvements have focused heavily on labor optimization, successfully reducing contract labor from a peak of 750 FTEs to approximately 425 FTEs, representing significant cost savings. The company implemented centralized recruiting functions and improved retention strategies, achieving nursing turnover rates below pre-pandemic levels. Technology investments include a major ERP conversion to Oracle Fusion and expanded dialysis services to 88 hospitals. Payer strategy evolution has emphasized growing relationships with Medicare Advantage plans, achieving 88% of MA contracts on case-rate basis rather than fee-for-service, providing more predictable revenue streams. The company has also focused on demonstrating clinical value through superior outcomes to justify premium reimbursement rates and resist margin pressure from managed care organizations.
EHC company profile · for informational purposes only — not investment advice.
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