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Here's Why You Should Invest in Encompass Health (EHC) Now
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Encompass Health Corporation (EHC - Free Report) has been benefiting from strong revenue growth, robust expansion plans and sound financial standing. A revised and solid 2021 outlook instills further optimism in the stock’s prospects.
The stock has gained 23.5% over a year against the industry’s decline of 26.2%.
Image Source: Zacks Investment Research
Style Score
The company is well-poised for progress as evident from its impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.
It has an impressive Growth Score of A, which reinstates the growth prospects of a company.
Impressive Earnings Surprise History
Encompass Health boasts an impressive earnings surprise record. It has surpassed earnings estimates in each of the trailing four quarters, the average surprise being. 14.81%.
Positive Estimate Revision
The Zacks Consensus Estimate for 2021 earnings has been revised upward by 5.8% in the past 30 days.
Solid 2021 Guidance
Following second-quarter 2021 results, the healthcare provider revised its 2021 business outlook. Revenues are now estimated to be $5.10-$5.25 billion, up from the prior guidance of $5.06-$5.23 billion. The mid-point of the newly-provided guidance suggests 11.4% growth from the 2020 reported figure. The same is in line with the Zacks Consensus Estimate of $5.18 billion.
Adjusted earnings per share from continuing operations is anticipated within $4.32-$4.47, higher than the previous guidance of $3.94-$4.16. The mid-point of the revised guidance indicates 52.1% surge from 2020-end reported figure. The same is pegged higher than the Zacks Consensus Estimate of $4.38 per share.
Of the medical sector players that reported second-quarter 2021 results, Molina Healthcare, Inc. (MOH - Free Report) , Anthem, Inc. and HCA Healthcare, Inc. (HCA - Free Report) raised their earnings guidance for 2021.
Business Tailwinds
Encompass Health has been witnessing a solid revenue growth with a 10-year CAGR of 9.5%. The first half of 2021 has gained momentum on the back of favorable pricing, increased volumes and robust contribution from its Inpatient Rehabilitation segment. Revenues are likely to improve in the days ahead considering the dire need for high-quality rehabilitation care and an aging U.S. population. Over the 2020-2025 period, revenue growth is anticipated in the range of 8% to 10%.
The company remains well-poised to grow on the back of robust expansion plans, which include inaugurating hospitals and adding beds to its existing facilities. Till the second quarter of 2021, the company has opened a total of three hospitals for this year, while five more are expected to launch in the latter half of 2021. It has robust expansion plans in place with 12 hospitals, nine hospitals and one hospital scheduled to open in 2022, 2023 and 2024, respectively.
The liquidity position of the healthcare provider appears strong with sound cash balance and decreasing debt levels. The cash generating abilities of Encompass Health bodes well. Its leverage ratio has been improving. The company has been tactical in utilizing its shareholders’ funds, reflected by its ROE of 19.5%, which is higher than the industry’s figure of 10%.
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Here's Why You Should Invest in Encompass Health (EHC) Now
Encompass Health Corporation (EHC - Free Report) has been benefiting from strong revenue growth, robust expansion plans and sound financial standing. A revised and solid 2021 outlook instills further optimism in the stock’s prospects.
Zacks Rank & Price Performance
Presently, Encompass Health carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock has gained 23.5% over a year against the industry’s decline of 26.2%.
Image Source: Zacks Investment Research
Style Score
The company is well-poised for progress as evident from its impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum, with the score being a weighted combination of all three factors.
It has an impressive Growth Score of A, which reinstates the growth prospects of a company.
Impressive Earnings Surprise History
Encompass Health boasts an impressive earnings surprise record. It has surpassed earnings estimates in each of the trailing four quarters, the average surprise being. 14.81%.
Positive Estimate Revision
The Zacks Consensus Estimate for 2021 earnings has been revised upward by 5.8% in the past 30 days.
Solid 2021 Guidance
Following second-quarter 2021 results, the healthcare provider revised its 2021 business outlook. Revenues are now estimated to be $5.10-$5.25 billion, up from the prior guidance of $5.06-$5.23 billion. The mid-point of the newly-provided guidance suggests 11.4% growth from the 2020 reported figure. The same is in line with the Zacks Consensus Estimate of $5.18 billion.
Adjusted earnings per share from continuing operations is anticipated within $4.32-$4.47, higher than the previous guidance of $3.94-$4.16. The mid-point of the revised guidance indicates 52.1% surge from 2020-end reported figure. The same is pegged higher than the Zacks Consensus Estimate of $4.38 per share.
Of the medical sector players that reported second-quarter 2021 results, Molina Healthcare, Inc. (MOH - Free Report) , Anthem, Inc. and HCA Healthcare, Inc. (HCA - Free Report) raised their earnings guidance for 2021.
Business Tailwinds
Encompass Health has been witnessing a solid revenue growth with a 10-year CAGR of 9.5%. The first half of 2021 has gained momentum on the back of favorable pricing, increased volumes and robust contribution from its Inpatient Rehabilitation segment. Revenues are likely to improve in the days ahead considering the dire need for high-quality rehabilitation care and an aging U.S. population. Over the 2020-2025 period, revenue growth is anticipated in the range of 8% to 10%.
The company remains well-poised to grow on the back of robust expansion plans, which include inaugurating hospitals and adding beds to its existing facilities. Till the second quarter of 2021, the company has opened a total of three hospitals for this year, while five more are expected to launch in the latter half of 2021. It has robust expansion plans in place with 12 hospitals, nine hospitals and one hospital scheduled to open in 2022, 2023 and 2024, respectively.
The liquidity position of the healthcare provider appears strong with sound cash balance and decreasing debt levels. The cash generating abilities of Encompass Health bodes well. Its leverage ratio has been improving. The company has been tactical in utilizing its shareholders’ funds, reflected by its ROE of 19.5%, which is higher than the industry’s figure of 10%.