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Encompass Health Corporation (EHC) Hits Fresh High: Is There Still Room to Run?
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Shares of Encompass Health (EHC - Free Report) have been strong performers lately, with the stock up 13.6% over the past month. The stock hit a new 52-week high of $123.9 in the previous session. Encompass Health has gained 33.8% since the start of the year compared to the -2.4% move for the Zacks Medical sector and the 7.9% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on August 4, 2025, Encompass Health reported EPS of $1.4 versus consensus estimate of $1.2 while it beat the consensus revenue estimate by 2.29%.
For the current fiscal year, Encompass Health is expected to post earnings of $5.24 per share on $5.92 in revenues. This represents a 18.28% change in EPS on a 10.23% change in revenues. For the next fiscal year, the company is expected to earn $5.73 per share on $6.44 in revenues. This represents a year-over-year change of 9.26% and 8.69%, respectively.
Valuation Metrics
Though Encompass Health has recently hit a 52-week high, what is next for Encompass Health? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Encompass Health has a Value Score of B. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.5X. On a trailing cash flow basis, the stock currently trades at 16.3X versus its peer group's average of 17.9X. Additionally, the stock has a PEG ratio of 2.17. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Encompass Health currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Encompass Health passes the test. Thus, it seems as though Encompass Health shares could have a bit more room to run in the near term.
How Does EHC Stack Up to the Competition?
Shares of EHC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Aveanna Healthcare Holdings Inc. (AVAH - Free Report) . AVAH has a Zacks Rank of #1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Aveanna Healthcare Holdings Inc. beat our consensus estimate by 350.00%, and for the current fiscal year, AVAH is expected to post earnings of $0.35 per share on revenue of $2.31 billion.
Shares of Aveanna Healthcare Holdings Inc. have gained 76.5% over the past month, and currently trade at a forward P/E of 20.45X and a P/CF of 43.91X.
The Medical - Outpatient and Home Healthcare industry is in the top 23% of all the industries we have in our universe, so it looks like there are some nice tailwinds for EHC and AVAH, even beyond their own solid fundamental situation.
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Encompass Health Corporation (EHC) Hits Fresh High: Is There Still Room to Run?
Shares of Encompass Health (EHC - Free Report) have been strong performers lately, with the stock up 13.6% over the past month. The stock hit a new 52-week high of $123.9 in the previous session. Encompass Health has gained 33.8% since the start of the year compared to the -2.4% move for the Zacks Medical sector and the 7.9% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on August 4, 2025, Encompass Health reported EPS of $1.4 versus consensus estimate of $1.2 while it beat the consensus revenue estimate by 2.29%.
For the current fiscal year, Encompass Health is expected to post earnings of $5.24 per share on $5.92 in revenues. This represents a 18.28% change in EPS on a 10.23% change in revenues. For the next fiscal year, the company is expected to earn $5.73 per share on $6.44 in revenues. This represents a year-over-year change of 9.26% and 8.69%, respectively.
Valuation Metrics
Though Encompass Health has recently hit a 52-week high, what is next for Encompass Health? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Encompass Health has a Value Score of B. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.6X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.5X. On a trailing cash flow basis, the stock currently trades at 16.3X versus its peer group's average of 17.9X. Additionally, the stock has a PEG ratio of 2.17. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this is even more important than the company's VGM Score. Fortunately, Encompass Health currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Encompass Health passes the test. Thus, it seems as though Encompass Health shares could have a bit more room to run in the near term.
How Does EHC Stack Up to the Competition?
Shares of EHC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Aveanna Healthcare Holdings Inc. (AVAH - Free Report) . AVAH has a Zacks Rank of #1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. Aveanna Healthcare Holdings Inc. beat our consensus estimate by 350.00%, and for the current fiscal year, AVAH is expected to post earnings of $0.35 per share on revenue of $2.31 billion.
Shares of Aveanna Healthcare Holdings Inc. have gained 76.5% over the past month, and currently trade at a forward P/E of 20.45X and a P/CF of 43.91X.
The Medical - Outpatient and Home Healthcare industry is in the top 23% of all the industries we have in our universe, so it looks like there are some nice tailwinds for EHC and AVAH, even beyond their own solid fundamental situation.