Back to top

Image: Bigstock

Why You Should Add Encompass Health to Your Portfolio Now

Read MoreHide Full Article

Key Takeaways

  • EHC benefits from rising patient volumes and increased demand for specialized rehabilitative care.
  • EHC's 2025 EPS is estimated at $5.30, up 19.6%, with 10.4% revenue growth to $5.9 billion.
  • EHC plans to add 150-200 beds each in 2026 and 2027.

Encompass Health Corporation (EHC - Free Report) is aided by growing patient volumes, frequent expansion initiatives and a strong financial position.

EHC’s Zacks Rank & Upbeat Price Performance

Encompass Health currently carries a Zacks Rank #2 (Buy).

The stock has gained 16.6% in the past year compared with the industry’s 7.2% growth.

Zacks Investment Research
Image Source: Zacks Investment Research

EHC’s Favorable Style Score

EHC carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. Back-tested results have shown so far that stocks with a favorable Value Score in combination with a solid Zacks Rank are the best investment bets.

Encompass Health’s Robust Growth Prospects

The Zacks Consensus Estimate for Encompass Health’s 2025 earnings is pegged at $5.30 per share, indicating a year-over-year improvement of 19.6%. The consensus mark for revenues is pegged at $5.9 billion, implying a year-over-year increase of 10.4%.

The consensus estimate for 2026 earnings is pegged at $5.81 per share, indicating an increase of 9.6% from the 2025 estimate. The consensus estimate for revenues is pegged at $6.5 billion, implying 8.8% growth from the 2025 estimate.

EHC’s Northbound Estimate Revision

The Zacks Consensus Estimate for 2025 earnings has been revised upward 0.2% in the past 60 days.

Encompass Health’s Impressive Earnings Surprise History

EHC’s bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 12.47%.

EHC’s Key Business Tailwinds

Encompass Health has exhibited solid revenue growth, largely fueled by an expanding patient base at its inpatient rehabilitation hospitals. For the first nine months of 2025, the company recorded an 10.6% increase in revenues compared with the same period in the prior year. This strong performance is driven by rising demand for specialized rehabilitative care that helps individuals recovering from chronic illnesses and injuries return to daily life. Such sustained demand is expected to continue supporting the momentum of the Inpatient Rehabilitation segment.

The company sees considerable growth potential in this segment, supported by a series of expansion initiatives. Encompass Health frequently launches new inpatient rehabilitation hospitals, either independently or in collaboration with prominent healthcare partners, across various U.S. communities. Each new facility enhances the company’s service capacity and broadens its nationwide footprint.

As of now, Encompass Health operates 173 hospitals spanning 39 states and Puerto Rico. The latest addition to its network was the Rehabilitation Hospital of Lake Worth, which opened this December. 

In both 2026 and 2027, Encompass Health plans to add 150-200 beds to existing facilities. The company’s ability to execute its growth strategy is supported by a strong financial foundation. As of Sept. 30, 2025, cash and cash equivalents totaled $48.7 million. Encompass Health generated $829.6 million in operating cash flows during the first nine months of 2025, representing an 14.6% increase year over year.

Other Stocks to Consider

Some other top-ranked stocks in the Medical space are ANI Pharmaceuticals, Inc. (ANIP - Free Report) , Collegium Pharmaceutical, Inc. (COLL - Free Report) and Pediatrix Medical Group, Inc. (MD - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ANI Pharmaceuticals’ earnings surpassed estimates in each of the last four quarters, the average surprise being 21.24%. The Zacks Consensus Estimate for ANIP’s 2025 earnings indicates a rise of 45.4% while the consensus mark for revenues implies an improvement of 41.6% from the respective year-ago actuals. The consensus mark for ANIP’s 2025 earnings has moved 0.3% north in the past 30 days. 

Collegium Pharmaceutical’s earnings beat estimates in each of the trailing four quarters, the average surprise being 10.63%. The Zacks Consensus Estimate for COLL’s 2025 earnings indicates a rise of 17.1% while the consensus mark for revenues implies an improvement of 24.2% from the respective year-ago actuals. The consensus mark for COLL’s 2025 earnings has moved 6.6% north in the past 60 days.

The bottom line of Pediatrix Medical outpaced estimates in each of the trailing four quarters, the average surprise being 35.42%. The Zacks Consensus Estimate for MD’s 2025 earnings indicates a rise of 37.1% from the year-ago actual.  The consensus mark for MD’s 2025 earnings has moved 16.3% north in the past 60 days. 

Shares of ANI Pharmaceuticals, Collegium Pharmaceutical and Pediatrix Medical have gained 42.4%, 61.9% and 64.6%, respectively, in the past year. 

Published in