It has been about a month since the last earnings report for The Ensign Group, Inc. (ENSG - Free Report) . Shares have added about 16.8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is ENSG due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Ensign Group Beats on Q4 Earnings, Raises '18 View
Ensign Group reported adjusted operating earnings of 40 cents per share in fourth-quarter 2017. The bottom line surpassed the Zacks Consensus Estimate of 36 cents. Earnings increased 33.3% year over year owing to higher revenues.
Net income was 21 cents per share, down 40% year over year.
Total revenues of $487.7 million increased nearly 12.6% year over year in the reported quarter and also beat the Zacks Consensus Estimate of $459 million.
Same store skilled nursing average daily revenue rates grew 4.9% year over year to $309.89 million. Same store managed care skilled nursing average daily revenue rates climbed 4.5% to $450.58 million, year over year.
Total Transitional and Skilled Services segment income was $39.9 million for the quarter under review, up 40.2% from the prior-year period.
Total Assisted and Independent Living Services segment revenues and income were up 13.7% to $35.8 million and 66.3% to $4.3 million, respectively, year over year.
Total Home Health and Hospice Services segment revenues and income were up 27.5% to $39.7 million and 27.7% to $5.8 million, respectively, year over year.
Total expenses rose 16.2% year over year to $461.6 million, primarily due to higher cost of services and general and administrative expense.
Adjusted operating earnings of $1.40 per share were in line with the Zacks Consensus Estimate.
Total revenues of $1.85 billion increased nearly 11.8% over the level in 2016 and also outpaced the Zacks Consensus Estimate of $1.80 billion.
Quarterly Segment Update
Transitional, Skilled & Assisted Living Services
The segment reported revenues of $403.5 million, up 11.5% year over year. Solid growth in skilled nursing and facilities drove this upside. Notably, the segment accounted for 82.7% of the total revenues in the fourth quarter.
Home Health & Hospice Services
For this segment, total operating revenues were $39.7 billion, up 27.4% year over year. This segment contributed 8.1% to the total revenues.
This segment reported revenues of $8.7 million, up 1.3% from the prior-year quarter. This segment accounted for 1.8% of the total revenues.
Total cash and cash equivalents decreased 26.6% to $42.3 million as of Dec 31, 2017 from $57.7 million as of Dec 31, 2016.
As of Dec 31, 2017, long-term debt was $302.9 million, up from $275.5 million at the end of 2016.
Cash from operations in 2017 was $72.9 million, down 1.3% year over year.
Ensign Group paid 4.50 cents per share, up 5.9% over the past year.
Management expects earnings in the range of $1.80-$1.87 per share, up from $1.58 to $1.66.
Revenues are anticipated to remain within the band of $2-$2.06 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. There have been three revisions higher for the current quarter. In the past month, the consensus estimate has shifted by 17.6% due to these changes.
The Ensign Group, Inc. Price and Consensus
At this time, ENSG has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was also allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value, growth, and momentum investors.
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise ENSG has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.