Encompass Health Corporation (EHC) AI Stock Analysis

Encompass Health Corporation delivers post-acute healthcare services across the United States through two primary operating segments: Inpatient Rehabilitation and Home Health and Hospice. Its Inpatient Rehabilitation division provides specialized inpatient and outpatient care for patients recovering from conditions including stroke, neurological disorders, cardiac and pulmonary issues, spinal cord injuries, orthopedic conditions, and amputations. The Home Health and Hospice segment operates mainly across Texas and the Southeast, providing Medicare-certified skilled nursing, home health aide services, therapy, and compassionate in-home care for terminally ill patients and their families. Headquartered in Birmingham, Alabama, the company was originally founded in 1983 as HealthSouth Corporation before rebranding in January 2018.

Revenue expanded steadily from $4.01B in FY2021 to $5.94B in FY2025, representing a 5-year revenue CAGR of 10.7%. Annual revenue growth was 12.6% in FY2021, 8.3% in FY2022, 10.4% in FY2023, 11.9% in FY2024, and 10.5% in FY2025. Operating margin shifted from 16.4% in FY2021 to 14.5% in FY2022, before climbing to 17.7% in FY2025. Net income increased from $412.2M in FY2021 to $566.2M in FY2025, alongside EPS rising from $4.22 to $5.46. For the latest quarter ended June 30, 2026, quarterly revenue growth was 9.6% year-over-year, while quarterly earnings grew 10.8% year-over-year.

As of June 30, 2026, Encompass Health held $107.7M in cash and short-term investments against $2.84B in total debt, resulting in net debt of $2.73B. The company recorded a current ratio of 1.19 and a debt-to-equity ratio of 1.09, supported by shareholders' equity of $2.60B and total assets of $7.46B. In FY2025, operating cash flow reached $1.18B and free cash flow was $439.2M. Capital allocation in FY2025 included $736.4M in capital expenditures, $158.0M in share buybacks, and $71.1M in dividends paid.

Encompass Health trades at a trailing P/E of 21.4x, which is below the 24.6x median of its US-listed Healthcare peers. Its forward P/E of 18.9x sits above the peer median of 17.3x, while its enterprise value-to-EBITDA ratio of 9.9x is lower than the peer median of 12.0x. Price-to-sales is 2.0x compared to the peer median of 4.1x. Over the past year, the stock returned 4.7%, trailing the S&P 500 return of 16.8%, but its 5-year return of 149.5% outperformed the S&P 500 return of 83.0%.

Encompass Health pays a quarterly dividend with an annualized forward payout of $0.84 per share, translating to a dividend yield of 0.66%. The dividend payout ratio is 13.4%, and the company has paid dividends for 14 consecutive years. However, its dividend growth over the past 5 years was annualized at -4.7%. The last ex-dividend date was October 1, 2026.

Wall Street analysts hold 12 Strong Buy ratings, 1 Buy rating, and zero Hold, Sell, or Strong Sell ratings on Encompass Health. The mean price target is $148.17, indicating upside of 15.9% from the last close of $127.87. For the fiscal year ending December 31, 2026, analysts estimate EPS of $6.11 on revenue of $6.46B. The company has beaten EPS expectations in each of the last 4 quarters, with its next earnings date scheduled for October 28, 2026.

This page is an AI-written research summary of Encompass Health Corporation (EHC). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

Related: EHC income statement, EHC balance sheet, EHC key metrics, EHC analyst forecast, EHC chart. See the EHC stock overview for the latest quote and news.