Encompass Health (NYSE:EHC) Shares Gap Up on Strong Earnings

Encompass Health Corporation (NYSE:EHC)’s stock price gapped up prior to trading on Friday following a better than expected earnings announcement. The stock had previously closed at $99.56, but opened at $115.00. Encompass Health shares last traded at $110.5260, with a volume of 194,168 shares.

The company reported $1.46 earnings per share for the quarter, beating analysts’ consensus estimates of $1.29 by $0.17. Encompass Health had a net margin of 9.33% and a return on equity of 17.84%. The firm had revenue of $1.54 billion for the quarter, compared to analyst estimates of $1.54 billion. During the same quarter in the previous year, the firm posted $1.17 earnings per share. The business’s revenue was up 9.9% on a year-over-year basis. Encompass Health has set its FY 2026 guidance at 5.810-6.100 EPS.

Analyst Ratings Changes

Several equities analysts have recently weighed in on the company. Raymond James Financial upgraded Encompass Health to a “strong-buy” rating in a report on Friday, October 31st. Barclays reaffirmed an “overweight” rating and set a $153.00 price target on shares of Encompass Health in a research report on Friday. Wall Street Zen raised shares of Encompass Health from a “hold” rating to a “buy” rating in a research note on Sunday, January 18th. Finally, Zacks Research cut shares of Encompass Health from a “strong-buy” rating to a “hold” rating in a research note on Wednesday, November 19th. Two equities research analysts have rated the stock with a Strong Buy rating, eight have issued a Buy rating and one has given a Hold rating to the company’s stock. According to data from MarketBeat.com, the company has a consensus rating of “Buy” and an average price target of $143.29.

Institutional Trading of Encompass Health

Hedge funds and other institutional investors have recently bought and sold shares of the business. Northwestern Mutual Wealth Management Co. grew its holdings in shares of Encompass Health by 3,059,159.7% during the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 3,793,482 shares of the company’s stock worth $402,640,000 after purchasing an additional 3,793,358 shares during the last quarter. Norges Bank bought a new stake in Encompass Health during the 2nd quarter worth approximately $139,536,000. Millennium Management LLC raised its stake in shares of Encompass Health by 140.0% during the third quarter. Millennium Management LLC now owns 1,223,665 shares of the company’s stock valued at $155,430,000 after acquiring an additional 713,738 shares during the last quarter. 8 Knots Management LLC acquired a new position in shares of Encompass Health during the second quarter worth $78,644,000. Finally, Alliancebernstein L.P. grew its stake in shares of Encompass Health by 23.4% in the third quarter. Alliancebernstein L.P. now owns 2,515,878 shares of the company’s stock worth $319,567,000 after purchasing an additional 476,564 shares during the last quarter. Institutional investors and hedge funds own 97.25% of the company’s stock.

Encompass Health Stock Up 12.3%

The firm has a market capitalization of $11.25 billion, a price-to-earnings ratio of 21.10, a P/E/G ratio of 1.54 and a beta of 0.73. The company has a debt-to-equity ratio of 0.76, a current ratio of 1.14 and a quick ratio of 1.14. The stock has a fifty day moving average of $104.47 and a two-hundred day moving average of $114.44.

About Encompass Health

Encompass Health Corporation is a leading provider of post‐acute healthcare services in the United States, operating a comprehensive network of inpatient rehabilitation hospitals and home health and hospice agencies. Its inpatient rehabilitation hospitals offer intensive therapy programs for patients recovering from conditions such as stroke, brain injury, spinal cord injury, cardiac and pulmonary disorders, and orthopedic procedures. Through its home health segment, Encompass Health delivers skilled nursing, physical therapy, occupational therapy and speech therapy to patients in the comfort of their homes, while its hospice services provide end‐of‐life care focused on symptom management and emotional support for patients and families.

Founded in 1984 as HealthSouth Corporation and rebranded as Encompass Health in 2018, the company has grown organically and through acquisitions to serve patients across more than 30 states.