Encompass Health Corp

Health Care
Hospital/Nursing Management
www.encompasshealth.com

Earnings Score
Moat Score
Safety Score

Market Cap $11.78B
PE 24
Debt $2.47B
Cash $122.80M
EV $14.13B
FCF $386.40M

Earnings

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Sales & Net Margins

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Earnings	$492.30M
EBIT	$809.80M
ROE	17%
ROA	12%
FCF	$386.40M
Equity	$2.88B
Growth Stability	77%
PE	23.92
PEG	3.14
PB	4.09
P/FCF	30.48
P/S	2.14
Price/Cash	0.01
Debt/Equity	0.86
Debt/FCF	6.4
Net Margins	10%
Op. Margins	15%
Earnings CAGR	6%
Sales Growth YoY	11%
Sales Growth QoQ	4%
Sales CAGR	4%
FCF CAGR	-10%
Equity CAGR	13%
Earnings Stability	0.55
Earnings Growth YoY	35%
Earnings Growth QoQ	26%
Earnings CAGR 5Y	8%

Sales CAGR 5Y	2%
FCF CAGR 5Y	-1%
Equity CAGR 5Y	6%
Earnings CAGR 3Y	7%
Sales CAGR 3Y	7%
FCF CAGR 3Y	56%
Equity CAGR 3Y	16%
Market Cap	$11.78B
Revenue	$5.51B
Dividend Yield	1%
Payout Ratio	13%
Assets	$6.64B
Total Debt	$2.47B
Cash	$122.80M
Shares Outstanding	100.5M
EV	14.13B
Earnings Score	47%
Moat Score	93%
Safety Score	79%
Final Score	73%
Working Capital	54.9M
Current Ratio	1.06
Shares Growth 3y	0%
Equity Growth QoQ	3%
Equity Growth YoY	22%

Assets & ROA

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Stockholders Equity & ROE

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Encompass Health Corp provides post-acute healthcare services in the United States through a network of inpatient rehabilitation hospitals, home health agencies and hospice agencies. It operates in two segments: inpatient rehabilitation and home health and hospice. The Inpatient rehabilitation segment contributes the majority of the firm's revenue and provides specialized rehabilitative treatment through a network of inpatient hospitals. These hospitals are concentrated in the eastern half of the United States and Texas. The Home health and hospital segment provides skilled home health services through agencies concentrated in the southeastern United States and Texas, which include nursing, physical, occupational, and speech therapy, social work, and hospice services.

SEC Filings

Direct access to Encompass Health Corp (EHC) Annual Reports (10K) and Quarterly Reports (10Q) from the SEC website.

2025
- 10-Q Mar 31
2024
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31
2023
- 10-K Dec 31
- 10-Q Sep 30
- 10-Q Jun 30
- 10-Q Mar 31

Sector Comparison

How does Encompass Health Corp compare to its competitors?

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Peter Lynch's Chart

This chart shows the current pricing of Encompass Health Corp compared to its past. The addition of the earnings trend line provides further insights into the company's earnings power.

CAGR 6%

Stability 55%

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Encompass Health Corp Discounted Cash Flow

Fully customizable DCF calculator online for Encompass Health Corp.

Years

Calculation mode

= $2B

	0	1	2	3	4	5	6	7	8	9	10	TV
fcf	$386M	$349M	$314M	$284M	$256M	$231M	$208M	$188M	$169M	$153M	$138M	$1.4B
DCF		$317M	$260M	$213M	$175M	$143M	$117M	$96M	$79M	$65M	$53M	$531M
Value	$2B

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Net Margins	6%	7%	6%	7%	8%	6%	8%	6%	7%	8%	10%
ROA	-	13%	12%	11%	10%	9%	10%	10%	10%	11%	12%
ROE	-	27%	18%	19%	21%	14%	17%	15%	16%	16%	17%

Good Net Margins (10.38%)

Net Margins are high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Safety and Stability

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	TTM
Debt over FCF	-	7.05	5.98	4.95	11.65	10.65	19.32	22.74	10.13	6.93	6.4
Debt over Equity	4.07	3.25	1.81	1.61	1.81	1.67	1.39	1.52	1.2	0.89	0.86
Growth Stability	-	-	-	100%	100%	94%	100%	77%	100%	100%	77%

Bad Debt/FCF ratio (6.4)

Net Margins are too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Good Debt/Equity ratio (0.86)

The company is not overleveraged and has a good balance between equity and debt.

Bad Graham’s Stability (77%)

The company has a bad stability in its earnings, which is a sign of a bad competitive advantage.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Years	12/2015	12/2016	12/2017	12/2018	12/2019	12/2020	12/2021	12/2022	12/2023	12/2024	CAGR 5Y
Revenue YoY growth	-	17%	7%	8%	8%	1%	10%	-15%	10%	12%	2%
Earnings YoY growth	-	36%	4%	14%	23%	-21%	45%	-34%	30%	30%	8%
Equity YoY growth	-	19%	53%	9%	9%	16%	20%	-23%	23%	24%	6%
FCF YoY growth	-	20%	1%	18%	-48%	17%	-45%	-28%	120%	35%	-1%