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Encompass Health Corporation (EHC) Hit a 52 Week High, Can the Run Continue?
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Shares of Encompass Health (EHC - Free Report) have been strong performers lately, with the stock up 6.8% over the past month. The stock hit a new 52-week high of $125.86 in the previous session. Encompass Health has gained 36% since the start of the year compared to the -1.4% move for the Zacks Medical sector and the 10.1% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any 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
While Encompass Health has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. 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 F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.9X. On a trailing cash flow basis, the stock currently trades at 16.6X versus its peer group's average of 18.1X. Additionally, the stock has a PEG ratio of 2.21. 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 consider the stock's Zacks Rank, 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 a solid earnings estimate revision trend.
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 potential in the weeks and months to come.
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 D.
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 $0.42 per share on revenue of $2.31 billion.
Shares of Aveanna Healthcare Holdings Inc. have gained 33.9% over the past month, and currently trade at a forward P/E of 19.81X and a P/CF of 50.13X.
The Medical - Outpatient and Home Healthcare industry is in the top 36% 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) Hit a 52 Week High, Can the Run Continue?
Shares of Encompass Health (EHC - Free Report) have been strong performers lately, with the stock up 6.8% over the past month. The stock hit a new 52-week high of $125.86 in the previous session. Encompass Health has gained 36% since the start of the year compared to the -1.4% move for the Zacks Medical sector and the 10.1% return for the Zacks Medical - Outpatient and Home Healthcare industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any 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
While Encompass Health has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. 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 F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 24X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.9X. On a trailing cash flow basis, the stock currently trades at 16.6X versus its peer group's average of 18.1X. Additionally, the stock has a PEG ratio of 2.21. 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 consider the stock's Zacks Rank, 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 a solid earnings estimate revision trend.
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 potential in the weeks and months to come.
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 D.
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 $0.42 per share on revenue of $2.31 billion.
Shares of Aveanna Healthcare Holdings Inc. have gained 33.9% over the past month, and currently trade at a forward P/E of 19.81X and a P/CF of 50.13X.
The Medical - Outpatient and Home Healthcare industry is in the top 36% 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.