Encompass Health Corp
🔔 Watch stock
Assessment
Our Rating
A journalistic assessment by our editorial team at the time of the deep dive — it rates the company, not the entry point. Not investment advice and not a solicitation to buy or sell.
The business works in principle, but one material question is open. As long as it stays open, our findings do not carry a quality verdict.
Why this colour
The substance is documented and not in dispute: the business works, the cash flow is real, the balance sheet is healthy, there is no going-concern flag, no accounting or governance breach and no liquidity question. What tips this to the more cautious grade is the structure of the revenue side: roughly 82 percent of sales hang on a single payer whose price is set administratively — and whose advisory commission recommended a 7 percent cut in January 2026 that would cost more than half of annual shareholder profit. This is not an existential question; interest coverage, roughly $726 million of undrawn revolver capacity and the owned real estate argue clearly against that. But it is a concentration the company cannot resolve on its own. Hence yellow: first-class execution, externally determined price. The decision is yours.
What the thesis turns on
Assessment: Opportunities & Risks
Encompass Health is an unusually cleanly run company in a niche with high barriers to entry: 8 of 9 points on the balance-sheet test, an Altman Z of 5.75, a 25.2 percent return on equity, three years of rising revenue to $5,935.2 million, and every credit covenant met with room to spare as of March 31, 2026. Against that stands not a balance-sheet problem but a dependency: roughly 82 percent of revenue comes from Medicare and Medicare Advantage, the advisory commission to Congress recommended a 7 percent cut in the base rate in January 2026, and a quarter of consolidated profit belongs to the hospital partners. Buying here means buying operational quality and political risk in the same package. Not investment advice.
Business model and market position
Encompass Health describes itself as the largest operator of inpatient rehabilitation hospitals in the United States: 174 hospitals across 39 states and Puerto Rico as of March 31, 2026, and 263,299 discharges in 2025. The market is tight — the annual report notes that the number of U.S. rehabilitation facilities fell only from 1,179 in 2010 to 1,170 in 2024 while demand grew. Ninety-two percent of patients arrive on referral from acute-care hospitals.
Growth and earnings quality
Revenue rose from $4,801.2 million in 2023 to $5,373.2 million in 2024 and $5,935.2 million in 2025, with profit attributable to shareholders climbing from $352.0 million to $566.2 million. Operating cash flow grew from $850.8 million to $1,175.6 million over the same period. In the first quarter of 2026 revenue rose 9.0 percent to $1,586.6 million and same-store discharges 1.6 percent. This is grown, not bought, earning power.
Balance sheet and funding
As of March 31, 2026, $2,573.8 million of debt sat against $3,308.4 million of equity; the covenants (leverage no higher than 4.50x, interest coverage at least 3.0x) were met, roughly $726 million of the revolver was undrawn and about 79 percent of the hospital real estate is owned. The May 29, 2026, issue of $500 million of 5.875 percent notes due 2034 spreads out the maturity wall — but costs more than the 4.500 percent notes it redeems.
Payer concentration
Per the 2025 annual report, roughly 82 percent of revenue comes from Medicare and Medicare Advantage — $3,886.9 million directly from Medicare plus $974.4 million from Medicare Advantage plans. The price is not negotiated but set by annual rulemaking. The mix is also shifting: about 54 percent of Medicare beneficiaries were in Medicare Advantage plans in 2025, projected by the Congressional Budget Office to reach roughly 64 percent by 2034 — and those plans typically pay less.
Regulatory cut risk
MedPAC resolved in January 2026 to recommend to Congress a 7 percent cut in the base payment rate for rehabilitation hospitals; against roughly $4,861 million of Medicare revenue that would be about $340 million a year — more than half the $566.2 million of shareholder profit. Nothing has been enacted, and MedPAC has recommended freezes or cuts every year since 2008; actual rates keep rising, and for fiscal 2027 the CMS proposed rule of April 2, 2026, would add a net 2.4 percent from October 1, 2026, after 2.6 percent in fiscal 2026. Review pressure adds to it: no Alabama hospital reached the opt-out validation rate in the second and third cycles, and the rate has varied across the four completed cycles as of the quarterly report for the period ended March 31, 2026.
Who owns the profit
Of $759.1 million in 2025 consolidated net income, $192.9 million was attributable to the minority partners in the 66 jointly operated hospitals, up from $111.0 million in 2023 — that share is growing faster than profit. It is the price of secured patient flow and has worked for years, but it distorts every ratio that sets consolidated revenue or consolidated equity against the market value of Encompass shares.
Worth Noting
Encompass Health reached our research list through the U.S. selection of the "Piotroski F-Score (7–9)" screen in our in-house stock scanner (16 U.S. hits, as of July 26, 2026). On the same day the stock also appeared on the EPS Acceleration, P/CF Ranking, Pros 80% and Pocket Pivot screens. These lists are recalculated daily.
Identity note: SEC file CIK 785161 was maintained under the name HealthSouth Corporation until December 12, 2017; the change of name to Encompass Health Corporation took effect January 1, 2018. The home health and hospice business was spun off on July 1, 2022, and appears only as a discontinued operation since — the series in this analysis do not blend the two perimeters.
Valuation figures are dated and evergreen: the anchor of roughly $99.70 per share is not a daily price but the arithmetic result of the roughly $9.9 billion market capitalization (data as of July 24, 2026) and the 99,199,080 shares reported on the cover page of the quarterly report as of April 24, 2026. Analyses are evergreen; daily prices are not a buy argument.
Stock Watch
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Price history
Chart
Interactive price chart (TradingView).
52-week range: 93.80 $ to 127.20 $ · Last price: 123.10 $ (As of: September 17, 2026)
Key figures
Key figures at a glance
Every figure we hold for this stock, grouped by topic. The question mark next to a label explains what the number means.
Basics
Performance
Technical Indicators
Calculated from the price history · as of 09/18/2026
Valuation
Profitability
Balance Sheet & Safety
Growth
Dividend
Quality & Screener
Highlighted are things our editorial team noticed: green = stands out as strong, red = deserves a closer look. No single metric is a verdict on its own — always read it in context.
Comparison
Industry comparison
The stock alongside the largest companies in the same group. The median row is the middle value of the companies shown above — not of the whole industry.
Industry: Medical Care Facilities
| Company | Market cap ($B) | P/E | EV/EBITDA | Gross Margin % | EBIT Margin % | Sales Growth (Year) % | Perf. 1Y % |
|---|---|---|---|---|---|---|---|
| Encompass Health Corp EHC | 12.2 | 21.3 | 9.8 | 43.9 | 19.0 | 10.5 | -0.2 |
| HCA Healthcare, Inc. HCA | 95.2 | 15.2 | 9.0 | 42.6 | 15.0 | 7.1 | 8.2 |
| Tenet Healthcare Corporation THC | 22.6 | 14.0 | 5.8 | 41.7 | 17.9 | 3.1 | 42.8 |
| DaVita HealthCare Partners Inc DVA | 11.7 | 18.1 | 8.9 | 32.4 | 13.9 | 6.5 | 43.0 |
| Universal Health Services Inc UHS | 10.9 | 7.9 | 5.5 | 44.6 | 11.2 | 9.7 | -3.1 |
| The Ensign Group Inc ENSG | 10.2 | 29.2 | 19.3 | 16.6 | 9.0 | 18.7 | 5.6 |
| Chemed Corp CHE | 6.7 | 29.8 | 15.7 | 33.1 | 12.9 | 4.1 | 11.2 |
| PACS Group, Inc. PACS | 6.5 | – | 20.3 | 17.3 | 8.5 | 29.3 | 274.9 |
| Lifestance Health Group Inc LFST | 4.8 | 204.7 | 39.5 | 33.6 | 5.5 | 13.9 | 144.9 |
| Median of companies shown | 10.9 | 19.7 | 9.8 | 33.6 | 12.9 | 9.7 | 11.2 |
Based on the most recently reported figures. Only stocks from the same trading venue are lined up, so the market caps are counted in one currency. Compare in a chart →
Fiscal years
Annual Figures
Fiscal years from the audited annual reports, oldest first. EBIT is the operating profit before interest and taxes; total assets are everything the company owns.
Revenue, operating income and net income per fiscal year $M
Revenue Operating income Net income
| Fiscal Year | Revenue ($M) | EBIT ($M) | Net Income ($M) | EPS ($) | Operating Cash Flow ($M) | Equity ($M) | Total Assets ($M) |
|---|---|---|---|---|---|---|---|
| 2016 | 3,643 | 649 | 248 | 2.49 | 606 | 736 | 4,682 |
| 2017 | 3,914 | 649 | 271 | 2.73 | 657 | 1,182 | 4,894 |
| 2018 | 4,277 | 682 | 292 | 2.93 | 762 | 1,329 | 5,227 |
| 2019 | 4,605 | 693 | 359 | 3.61 | 635 | 1,352 | 6,081 |
| 2020 | 3,566 | 662 | 284 | 2.85 | 705 | 1,588 | 6,446 |
| 2021 | 4,015 | 659 | 412 | 4.11 | 716 | 1,911 | 6,865 |
| 2022 | 4,349 | 630 | 271 | 2.70 | 706 | 1,310 | 5,637 |
| 2023 | 4,801 | 1,725 | 352 | 3.47 | 851 | 1,648 | 6,102 |
| 2024 | 5,373 | 865 | 456 | 4.46 | 1,003 | 2,067 | 6,535 |
| 2025 | 5,935 | 1,053 | 566 | 5.54 | 1,176 | 2,438 | 7,090 |
Quarters
Quarterly Figures
Each bar is one quarter, the last one is the most recent. Use the switch to step through the individual figures.
Revenue & Profit
Cash Flow
Balance Sheet
Margins
Per Share
Click the chart or tab into it, then use ← and → to step through the periods.
None of the selected stocks reports this metric. Pick another metric or switch between annual and quarterly.
· Total · per year
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The figures could not be loaded right now.
Source: fundamental data
| Quarter | EPS (Earnings Per Share) | EPS YoY (%) | Sales ($M) | Sales YoY (%) | Net Margin (%) | OCF ($M) | FCF ($M) |
|---|---|---|---|---|---|---|---|
| 2024: Q4 | 1.18 | 36.90 | 1,405 | 12.70 | 8.60 | 279 | 80 |
| 2025: Q1 | 1.48 | 34.80 | 1,455 | 10.60 | 10.40 | 289 | 126 |
| 2025: Q2 | 1.39 | 24.30 | 1,458 | 12.00 | 9.70 | 270 | 113 |
| 2025: Q3 | 1.24 | 16.70 | 1,478 | 9.40 | 8.60 | 271 | 84 |
| 2025: Q4 | 1.43 | 21.20 | 1,545 | 9.90 | 9.50 | 346 | 117 |
| 2026: Q1 | 1.93 | 30.30 | 1,587 | 9.00 | 12.30 | 313 | 151 |
| 2026: Q2 | 1.54 | 10.80 | 1,597 | 9.60 | 9.60 | 283 | 283 |
What Do These Terms Mean?
- EPS (Earnings Per Share):
- Quarterly profit divided by the total share count — how much of the profit works out to a single share.
- YoY (Year over Year):
- Change versus the same quarter a year ago — this is how you compare without seasonal distortion (e.g. the holiday shopping season).
- Sales:
- All revenue for the quarter, before any costs are deducted — the top line of the income statement.
- Net Margin:
- What percentage of sales is left over as profit in the end. Negative means the company is posting a loss.
- OCF (Operating Cash Flow):
- The cash that actually flows into the till from the core business during the quarter — harder to dress up than book profit.
- FCF (Free Cash Flow):
- Operating cash flow minus capital expenditures — the money that's genuinely free to use, say for paying down debt, buybacks, or dividends.
Screening
Appears in These Scanners
This stock currently matches 7 of our scanner strategies — each hit links to the scanner.
Backtested Scanners
Growth
Quality & Balance Sheet
Breakout & Setup
Momentum & Trend
Research
Only genuine hits from verified scanners count; pure ranking metrics (P/E, P/S, and similar, which just sort the whole universe) don't count as a hit. View all scanners
Outlook
Analysts & Price Target
Combined picture of the price targets and recommendations of every analyst covering the stock. Price targets are expectations for the next 12 months, not promises — and they often follow the price rather than predict it.
Distribution of Recommendations
Estimates by Fiscal Year
| Fiscal Year | EPS Estimate ($) | EPS Range ($) | Revenue Estimate ($M) | Expected Growth | Analysts |
|---|---|---|---|---|---|
| 12/31/2026 | 6.11 | 5.84 – 6.20 | 6,460 | 12.2% | 13 |
| 12/31/2027 | 6.68 | 6.15 – 6.88 | 6,994 | 9.2% | 13 |
Average of the analyst estimates for the coming fiscal years. The range shows how far the most optimistic and the most cautious estimate sit apart — the wider it is, the less certain the expectation.
Valuation
What is priced in?
Instead of guessing what the stock is worth, we turn the question around: what free cash flow growth has to happen for today’s market value to add up? The assumptions behind it can be moved.
Today’s market value implies roughly 13.0% growth in free cash flow per year over ten years (assumptions: discount rate 10.0%, terminal growth 2.5%).
| Free cash flow (last twelve months) | $413.4M |
|---|---|
| Market cap | $12.24B |
| Free cash flow in year ten | $1.41B |
| Terminal value as a share of market value | 60.6% |
For comparison: over the past five years free cash flow grew by 8.2% per year.
It shows which assumption is built into today’s price, not whether that assumption will hold. Every assumption can be changed with the sliders; the figures move with them.
A simplified model calculation — not a forecast and not a recommendation.
AI classification
AI Rating
Encompass Health verkauft keine KI-Produkte und weist keine KI-Erlöse aus. Der Geschäftsbericht 10-K für 2025 nennt künstliche Intelligenz aber an zwei Stellen mit Bezug zum eigenen Betrieb: als Hebel, der die Wirkung und Effizienz der eigenen Post-akut-Lösungen verstärken soll, und in den Risikofaktoren als Bestandteil der eigenen Dienstleistungen und Geschäftspraktiken. In den vier Quartalsberichten von Q1 2025 bis Q1 2026 und im Geschäftsbericht für 2024 kommt künstliche Intelligenz überhaupt nicht vor — die Beleglage trägt „nutzt“, nicht mehr.
View the full file — quotes, sources, reviewed filings
„The evolution of artificial intelligence capabilities has the potential to amplify the impact and efficiency of these solutions."
Die Weiterentwicklung von Fähigkeiten künstlicher Intelligenz hat das Potenzial, die Wirkung und die Effizienz dieser Lösungen zu verstärken.
10-K · 2026-02-26 · View SEC filing
„Moreover, from time to time, concerns may be expressed about whether our services or business practices, including the use of artificial intelligence, compromise the privacy of patients and others."
Darüber hinaus können von Zeit zu Zeit Bedenken geäußert werden, ob unsere Dienstleistungen oder Geschäftspraktiken — einschließlich des Einsatzes künstlicher Intelligenz — die Privatsphäre von Patienten und anderen beeinträchtigen.
10-K · 2026-02-26 · View SEC filing
Filings Reviewed: 10-Q 2026-05-01 · 10-K 2026-02-26 · 10-Q 2025-10-31 · 10-Q 2025-08-06 · 10-Q 2025-05-01 · 10-K 2025-02-28
Rated on July 26, 2026 · How the Rating Is Built
Growth
Growth Score
Ten checks against the annual reports — each one passed counts a point.
- Revenue grows by more than 15% a year over three years 10.9%
- More than 10% revenue growth is expected for the coming year 8.1%
- Share count grows by less than 3% a year 0.6%
- Revenue growth plus cash-flow margin add up to at least 40 ("Rule of 40") 17.9%
- Gross margin at 40% or higher and without meaningful erosion 95.7%
- Goodwill from acquisitions does not grow faster than revenue 18.6%
- Net debt below twice EBITDA 1.8 x EBITDA
- Operating cash flow covers the profits of the last three years 1,655 m
- Return on capital at 15% or higher, or up versus two years ago 16.8%
- Insiders hold at least 10% or are net buyers 1.1%
A criterion without figures counts neither as passed nor as failed; a score is only produced from 7 judgeable criteria upwards. Source: fundamental data. All ten criteria in detail
Quality check
AAQS
10/10 Quality stockThe AAQS (AlleAktien Quality Score) checks 10 quality criteria on growth, profitability, and balance-sheet strength — per the methodology developed and published by AlleAktien, calculated by us from our own fundamental data. A stock counts as a quality stock from 9 out of 10 points. Where a company has a shorter listing history, we calculate over the fiscal years available (at least five).
- Sales growth 10Y > 5% 5.6%
- Exp. sales growth 3Y > 5% 8.6%
- EBIT growth 10Y > 5% 5.5%
- Exp. EBIT growth 3Y > 5% 9.8%
- Net debt < 4x EBIT 2.4x
- EBIT positive, 10Y straight 10
- Max. EBIT decline < 50% 49.9%
- Return on equity > 15% 69.7%
- ROCE > 15% 16.8%
- Expected return > 10% 13.7%
View stocks with the full AAQS score · Read the methodology at AlleAktien
Source: fundamental data
Insiders
Insider Transactions
Reportable transactions by officers and major shareholders from SEC Form 4 filings. "Other" includes things like stock grants and option exercises without a buy/sell character.
| Date | Person | Role | Type | Shares | Price | Value |
|---|---|---|---|---|---|---|
| Aug 31, 2026 | Price Andrew L | Chief Accounting Officer | Sell | 5,211 | 120.93 | 630,166 |
| Aug 31, 2026 | Darby John Patrick | EVP, Gen Counsel & Secretary | Sell | 4,858 | 121.09 | 588,255 |
| Aug 31, 2026 | Darby John Patrick | EVP, Gen Counsel & Secretary | Other | 4,858 | 35.06 | 170,321 |
| Aug 10, 2026 | Coltharp Douglas E | EVP & Chief Financial Officer | Sell | 18,869 | 125.38 | 2,365,795 |
| Aug 10, 2026 | Tarr Mark J | President & CEO | Sell | 1,579 | 126.06 | 199,049 |
| Aug 10, 2026 | Tarr Mark J | President & CEO | Sell | 171,569 | 125.46 | 21,525,047 |
| Aug 10, 2026 | Darby John Patrick | EVP, Gen Counsel & Secretary | Sell | 8,906 | 125.95 | 1,121,711 |
| Jul 16, 2026 | Reidy Christopher R | Director | Other | 319 | 112.40 | 35,856 |
| Jul 16, 2026 | Christie Edward M III | Director | Other | 248 | 112.43 | 27,883 |
| Jul 15, 2026 | Reidy Christopher R | Director | Other | 21 | 0.00 | – |
The company
About the Company
Encompass Health Corporation betreibt stationäre Reha-Kliniken in den USA und Puerto Rico. Das Unternehmen bietet spezialisierte rehabilitative Behandlung mittels Technologie und Therapie auf stationärer Basis für Patienten an, die sich von einer schweren Verletzung oder Erkrankung erholen.
- CEO Insider Trades (12 Mo.)
- selling own stock
- Employees
- 29,699
- Headquarters
- Birmingham, AL
- Address
- 9001 Liberty Parkway, 35242 Birmingham, United States
- Phone
- 205 967 7116
- Website
- encompasshealth.com
- IPO Date
- 09/30/1986
- ISIN
- US29261A1007
- Stock Split
- 1257:1000 on 07/01/2022
- Stock Split
- 1:5 on 10/26/2006
- Stock Split
- 2:1 on 03/18/1997
Management
| Name | Title | Birth Year |
|---|---|---|
| Mark J. Tarr | CEO, President & Director | 1962 |
| Douglas E. Coltharp | Executive VP & CFO | 1962 |
| Patrick W. Tuer | Executive VP & COO | 1985 |
| John Patrick Darby | Executive VP, General Counsel & Corporate Secretary | 1965 |
| Elissa Joy Charbonneau D.O., M.S. | Chief Medical Officer | 1960 |
| Andrew L. Price | Senior VP & Chief Accounting Officer | 1967 |
| Rusty Yeager | Chief Information Officer & Senior VP | – |
| Mark Miller | Senior Vice President of Investor Relations & Strategic Planning | – |
| Dawn Rock | Chief Compliance Officer | – |
| Anthony A. Hernandez | Chief Human Resources Officer | 1966 |
Executives per the latest required filings; titles kept in their original language. Source: fundamental data.
Filings
Company Filings (8-K)
An 8-K is the filing a US company must use to disclose material events immediately — takeovers, changes at the top, major contracts or payment troubles, for instance. The links open the original document at the US Securities and Exchange Commission (SEC).
Data as of: September 17, 2026 · Source: fundamental data & SEC filings (annual and quarterly reports, 10-K/10-Q)
Note: pure fact-based analysis, not investment advice and not a solicitation to buy or sell. All figures without guarantee.