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Encompass Health (EHC) Plans a 50-Bed Facility to Serve Texas

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Encompass Health Corporation (EHC - Free Report) recently disclosed preliminary plans to construct an inpatient rehabilitation hospital in San Antonio, TX. Equipped with 50 beds, the new facility, when operational, is expected to bring enhanced inpatient rehabilitation services across the Westover Hills community.

The hospital will offer physical, occupational and speech therapies, which will be made possible with the availability of advanced rehabilitation technologies and equipment, and skilled nurses, therapists and physicians within the facility. Nursing care will be made available round the clock.

Therefore, personalized care can be provided to patients recovering from debilitating illnesses and injuries, such as strokes and other neurological disorders, brain injuries, spinal cord injuries, amputations and complex orthopedic conditions. This, in turn, will assure speedy recovery and enable patients to resume their daily life.  

The latest announcement reflects Encompass Health’s efforts to solidify its footprint across Texas, wherein it already operates 27 hospitals. The last addition to EHC’s hospital count in the state was made in November 2023, with the 40-bed Encompass Health Rehabilitation Hospital of Prosper. It also has two other facilities in the development phase in two other cities of Texas, Houston and Amarillo. Such initiatives are also a means to cater to the sustained demand for effective rehabilitation services across different U.S. communities.

By making constant additions to its national network of inpatient rehabilitation hospitals, Encompass Health benefits from the opportunity to treat an expanding patient base and earn higher revenues. An uptick in patient volumes bodes well for the top line of any healthcare facility operator like EHC. It derived $4.7 billion in revenues from its inpatient rehabilitation services in 2023, which advanced 10.4% year over year.

EHC boasts an extensive network of rehabilitation hospitals in the United States, with the current count being 160. To build such a portfolio over the years, it has been following an active expansion strategy pursuant to which it often undertook the sole responsibility or teamed up with regional healthcare providers. The collaborations put Encompass Health at an advantage as it can gain an in-depth knowledge of the diversified healthcare needs of a region. In March 2024, EHC formed a joint venture with the Georgia-based integrated health system, Piedmont Healthcare, to build a 40-bed inpatient rehabilitation hospital in the state.

Shares of Encompass Health have gained 34.6% in the past year compared with the industry’s 21.1% growth. EHC currently carries a Zacks Rank #3 (Hold).

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Stocks to Consider

Some better-ranked stocks in the Medical space are Organon & Co. (OGN - Free Report) , Insulet Corporation (PODD - Free Report) and Shockwave Medical, Inc. (SWAV - Free Report) . While Organon currently sports a Zacks Rank #1 (Strong Buy), Insulet and ShockWave Medical carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Organon’s earnings surpassed estimates in two of the last four quarters and missed the mark twice, the average surprise being 5.06%. The Zacks Consensus Estimate for OGN’s 2024 earnings indicates a rise of 2.4%, while the consensus mark for revenues suggests an improvement of 1% from the respective prior-year tallies. The consensus mark for OGN’s 2024 earnings has moved 1% north in the past 60 days.

The bottom line of Insulet outpaced estimates in each of the trailing four quarters, the average beat being 100.09%. The Zacks Consensus Estimate for PODD’s 2024 earnings indicates a rise of 12%, while the consensus mark for revenues suggests an improvement of 15.7% from the respective prior-year tallies. The consensus mark for PODD’s 2024 earnings has moved 1.7% north in the past 30 days.

ShockWave Medical’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 13.55%. The Zacks Consensus Estimate for SWAV’s 2024 earnings indicates a rise of 27%, while the same for revenues suggests an improvement of 26.2% from the respective prior-year tallies. The consensus mark for SWAV’s 2024 earnings has moved up 7.7% in the past 60 days.

The ShockWave Medical stock has gained 38.4% in the past year. However, shares of Organon and Insulet have declined 23.6% and 47.7%, respectively, in the same time frame.  

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