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4 Medical Stocks With "Beat" Written All Over Them for Q1 2026
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The first-quarter 2026 earnings season for the Medical sector is gaining momentum, with early reporters highlighting a mixed landscape in operating trends. Key growth drivers include improved revenues per equivalent admission, stable occupancy, continued rate hikes and accelerating adoption of tech-enabled services. However, these tailwinds are being partially offset by volume mix shifts, escalating medical costs and high salaries and benefits.
Drawing on our proprietary research and market insight, we’ve identified four stocks — CVS Health Corporation (CVS - Free Report) , Tenet Healthcare Corporation (THC - Free Report) , The Ensign Group, Inc. (ENSG - Free Report) and Encompass Health Corporation (EHC - Free Report) — that appear well-positioned to beat earnings estimates this season.
According to the latest Earnings Trends report dated April 24, the medical sector (one of the 16 broad Zacks sectors within the Zacks Industry) is projected to experience a 7.1% decline in earnings for the first quarter, while revenues are anticipated to rise by 6.3%.
Factors at Play for Medical Stocks in Q1
The medical sector spans a wide and tightly linked network of businesses, from hospitals and physician groups to nursing care facilities, insurers, drugmakers, device companies, and outpatient and home care providers. Demand remains structurally strong, supported by an aging population and steadily rising healthcare usage, which continues to support revenue growth across most segments.
Profitability, however, stayed under pressure in the near term. Many companies increased spending on digital systems, automation and clinical tools to modernize operations, but these investments added to costs. At the same time, wage inflation and higher employee benefit expenses continued to squeeze margins, especially for labor-heavy providers.
Health insurers faced a choppy environment. Government plan enrollment trends remained uneven, while reimbursement limits and heightened regulatory oversight forced some players to scale back less attractive products. Utilization levels stayed elevated, keeping medical costs in focus. Still, better pricing discipline and improving cost control are gradually helping stabilize margins for select insurers. Premium rate hikes also provided some cushion, helping offset higher claims activity.
Hospital and healthcare facilities are expected to have witnessed a mixed operating environment. Several major operators experienced modest or flat patient volume trends, with some elective procedures softer than expected and declines in same-store admissions. Where average revenue per admission rose, it helped support revenue growth, but volume strength was not broad-based, and higher costs for supplies and labor continued to constrain margin expansion.
Across the sector, technology adoption remained a clear long-term driver. Wider use of analytics, automation and AI tools is improving workflows, supporting clinical decision-making and helping providers deliver care more efficiently.
How to Identify Potential Outperformers?
Spotting healthcare stocks poised for an earnings beat is not easy in today’s crowded market. But our proprietary methodology cuts through the noise, pinpointing companies with strong potential to outperform. Backed by in-depth research and market insight, we have leveraged the Zacks Stock Screener to identify top healthcare names that stand out ahead of their earnings releases.
These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to surpass expectations. Our research shows that for stocks with this combination, the chances of an earnings beat are as high as 70%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Our Picks in the Medical Sector
One can start with Ensign, which provides nursing care and rehabilitative services. Headquartered in San Juan Capistrano, CA, the company’s first quarter earnings are expected to have benefited from higher same facility occupancy (85.5% vs 82.6% year-ago), higher patient days and skilled service performance.
The Zacks Consensus Estimate for Medicare Skilled Nursing Average Daily Revenue indicates 8.6% year-over-year growth. The consensus estimate for Ensign’s first-quarter earnings is pegged at $1.79 per share, which indicates 17.8% year-over-year growth. The consensus mark for revenues of $1.39 billion indicates an 18.5% increase. UHS has an Earnings ESP of +1.12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
It beat earnings estimates in all the past four quarters, with an average of 2.9%.
You may also watch Encompass Health, which operates inpatient rehabilitation hospitals. Headquartered in Birmingham, AL, the company’s first quarter earnings are expected to have benefited from increased discharges and net patient revenue per discharge, and a higher occupancy rate (79.7% versus 78.8% a year ago).
The Zacks Consensus Estimate for net inpatient operating revenues indicates 8.1% year-over-year growth. The consensus estimate for Encompass Health’s first-quarter earnings is pegged at $1.51 per share, which indicates 10.2% year-over-year growth. The consensus mark for revenues of $1.57 billion predicts an 8% increase. EHC has an Earnings ESP of +0.17% and a Zacks Rank #2.
It beat earnings estimates in all the past four quarters, with an average of 12.1%.
Encompass Health Corporation Price and EPS Surprise
Woonsocket, RI-based CVS Health is a health solutions company with integrated offerings across the entire spectrum of pharmacy care. Lower medical benefit ratio of 86.3% (from 87.3% a year ago), increased prescription filled, and growing Health Care Benefits operating income are expected to have supported its first quarter results.
The Zacks Consensus Estimate for CVS Health’s bottom line for the to-be-reported quarter is pegged at $2.21 per share, which improved by a penny over the past month. The consensus mark for revenues is pegged at $94.37 billion. CVS has an Earnings ESP of +1.37% and a Zacks Rank #3.
It also beat earnings estimates in each of the past four quarters, with an average surprise of 20.6%.
Finally, we have Dallas, TX-based Tenet Healthcare, which is one of the major medical facility operators. It is witnessing a favorable payer mix and improved acuity, along with growing demand for ambulatory care. It has an Earnings ESP of +5.14% and a Zacks Rank #3.
The consensus mark for first-quarter revenues is pegged at $5.39 billion, indicating 3.2% year-over-year growth. The EPS estimate of $4.21 has increased by 2 cents over the past week. The Zacks Consensus Estimate for the first-quarter same-hospital average length of stay indicates 6.5% year-over-year growth. The same for net patient service revenue per adjusted admissions signals 11.3% increase.
It beat earnings estimates in each of the past four quarters, the average surprise being 27%.
Tenet Healthcare Corporation Price and EPS Surprise
View the Zacks #1 Rank List
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4 Medical Stocks With "Beat" Written All Over Them for Q1 2026
The first-quarter 2026 earnings season for the Medical sector is gaining momentum, with early reporters highlighting a mixed landscape in operating trends. Key growth drivers include improved revenues per equivalent admission, stable occupancy, continued rate hikes and accelerating adoption of tech-enabled services. However, these tailwinds are being partially offset by volume mix shifts, escalating medical costs and high salaries and benefits.
Drawing on our proprietary research and market insight, we’ve identified four stocks — CVS Health Corporation (CVS - Free Report) , Tenet Healthcare Corporation (THC - Free Report) , The Ensign Group, Inc. (ENSG - Free Report) and Encompass Health Corporation (EHC - Free Report) — that appear well-positioned to beat earnings estimates this season.
According to the latest Earnings Trends report dated April 24, the medical sector (one of the 16 broad Zacks sectors within the Zacks Industry) is projected to experience a 7.1% decline in earnings for the first quarter, while revenues are anticipated to rise by 6.3%.
Factors at Play for Medical Stocks in Q1
The medical sector spans a wide and tightly linked network of businesses, from hospitals and physician groups to nursing care facilities, insurers, drugmakers, device companies, and outpatient and home care providers. Demand remains structurally strong, supported by an aging population and steadily rising healthcare usage, which continues to support revenue growth across most segments.
Profitability, however, stayed under pressure in the near term. Many companies increased spending on digital systems, automation and clinical tools to modernize operations, but these investments added to costs. At the same time, wage inflation and higher employee benefit expenses continued to squeeze margins, especially for labor-heavy providers.
Health insurers faced a choppy environment. Government plan enrollment trends remained uneven, while reimbursement limits and heightened regulatory oversight forced some players to scale back less attractive products. Utilization levels stayed elevated, keeping medical costs in focus. Still, better pricing discipline and improving cost control are gradually helping stabilize margins for select insurers. Premium rate hikes also provided some cushion, helping offset higher claims activity.
Hospital and healthcare facilities are expected to have witnessed a mixed operating environment. Several major operators experienced modest or flat patient volume trends, with some elective procedures softer than expected and declines in same-store admissions. Where average revenue per admission rose, it helped support revenue growth, but volume strength was not broad-based, and higher costs for supplies and labor continued to constrain margin expansion.
Across the sector, technology adoption remained a clear long-term driver. Wider use of analytics, automation and AI tools is improving workflows, supporting clinical decision-making and helping providers deliver care more efficiently.
How to Identify Potential Outperformers?
Spotting healthcare stocks poised for an earnings beat is not easy in today’s crowded market. But our proprietary methodology cuts through the noise, pinpointing companies with strong potential to outperform. Backed by in-depth research and market insight, we have leveraged the Zacks Stock Screener to identify top healthcare names that stand out ahead of their earnings releases.
These stocks have the ideal combination of two ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to surpass expectations. Our research shows that for stocks with this combination, the chances of an earnings beat are as high as 70%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Our Picks in the Medical Sector
One can start with Ensign, which provides nursing care and rehabilitative services. Headquartered in San Juan Capistrano, CA, the company’s first quarter earnings are expected to have benefited from higher same facility occupancy (85.5% vs 82.6% year-ago), higher patient days and skilled service performance.
The Zacks Consensus Estimate for Medicare Skilled Nursing Average Daily Revenue indicates 8.6% year-over-year growth. The consensus estimate for Ensign’s first-quarter earnings is pegged at $1.79 per share, which indicates 17.8% year-over-year growth. The consensus mark for revenues of $1.39 billion indicates an 18.5% increase. UHS has an Earnings ESP of +1.12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
It beat earnings estimates in all the past four quarters, with an average of 2.9%.
The Ensign Group, Inc. Price and EPS Surprise
The Ensign Group, Inc. price-eps-surprise | The Ensign Group, Inc. Quote
You may also watch Encompass Health, which operates inpatient rehabilitation hospitals. Headquartered in Birmingham, AL, the company’s first quarter earnings are expected to have benefited from increased discharges and net patient revenue per discharge, and a higher occupancy rate (79.7% versus 78.8% a year ago).
The Zacks Consensus Estimate for net inpatient operating revenues indicates 8.1% year-over-year growth. The consensus estimate for Encompass Health’s first-quarter earnings is pegged at $1.51 per share, which indicates 10.2% year-over-year growth. The consensus mark for revenues of $1.57 billion predicts an 8% increase. EHC has an Earnings ESP of +0.17% and a Zacks Rank #2.
It beat earnings estimates in all the past four quarters, with an average of 12.1%.
Encompass Health Corporation Price and EPS Surprise
Encompass Health Corporation price-eps-surprise | Encompass Health Corporation Quote
Woonsocket, RI-based CVS Health is a health solutions company with integrated offerings across the entire spectrum of pharmacy care. Lower medical benefit ratio of 86.3% (from 87.3% a year ago), increased prescription filled, and growing Health Care Benefits operating income are expected to have supported its first quarter results.
The Zacks Consensus Estimate for CVS Health’s bottom line for the to-be-reported quarter is pegged at $2.21 per share, which improved by a penny over the past month. The consensus mark for revenues is pegged at $94.37 billion. CVS has an Earnings ESP of +1.37% and a Zacks Rank #3.
It also beat earnings estimates in each of the past four quarters, with an average surprise of 20.6%.
CVS Health Corporation Price and EPS Surprise
CVS Health Corporation price-eps-surprise | CVS Health Corporation Quote
Finally, we have Dallas, TX-based Tenet Healthcare, which is one of the major medical facility operators. It is witnessing a favorable payer mix and improved acuity, along with growing demand for ambulatory care. It has an Earnings ESP of +5.14% and a Zacks Rank #3.
The consensus mark for first-quarter revenues is pegged at $5.39 billion, indicating 3.2% year-over-year growth. The EPS estimate of $4.21 has increased by 2 cents over the past week. The Zacks Consensus Estimate for the first-quarter same-hospital average length of stay indicates 6.5% year-over-year growth. The same for net patient service revenue per adjusted admissions signals 11.3% increase.
It beat earnings estimates in each of the past four quarters, the average surprise being 27%.
Tenet Healthcare Corporation Price and EPS Surprise
Tenet Healthcare Corporation price-eps-surprise | Tenet Healthcare Corporation Quote