Upside case
Bull case
$155+57.6%
EHC would need investors to value it at roughly 26x earnings — about 9x more generous than today's 16x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated Jun 18, 2026
Encompass Health Corporation (EHC) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
26
analysts
21 bullish · 1 bearish · 26 covering EHC
Strong Buy
1
Buy
20
Hold
4
Sell
1
Strong Sell
0
Consensus Target
$146
+48.9% vs today
Scenario Range
$74 – $155
Model bear to bull value window
Coverage
26
Published analyst ratings
Valuation Context
16.3x
Forward P/E · Market cap $9.7B
EHC price targets
Three scenarios for where EHC stock could go
Current
~$98
Confidence
55 / 100
Updated
Jun 18, 2026
Where we are now
Current · $98
Bear
$74
Base
$117
Bull
$155
Market caseClosest to today
Base case
$117+19.6%
At 20x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$74-24.6%
If investor confidence fades or macro conditions deteriorate, a 4x multiple contraction could push EHC down roughly 25% from where it trades now.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Encompass Health Corporation
EHC · NYSEHealthcareMedical - Care FacilitiesDecember year-end
Encompass Health operates a network of inpatient rehabilitation hospitals and home health/hospice services across the United States. It generates revenue primarily from Medicare reimbursements for its inpatient rehabilitation services — which account for the majority of its business — supplemented by home health and hospice care payments. The company's competitive advantage lies in its scale as the largest owner and operator of inpatient rehabilitation facilities in the country, creating operational efficiencies and referral network advantages.
Market Cap
$9.7B
Revenue TTM
$6.1B
Net Income TTM
$609M
Net Margin
10.0%
EHC Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
100%Exceptional
12 quarters tracked
Revenue Beat Rate
75%Exceptional
vs consensus estimates
Avg EPS Surprise
+13.0%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 4 of 4Q3 2025
EPS
$1.40/$1.23
Revenue
$1.5B/$1.4B
Q4 2025
EPS
$1.23/$1.19
Revenue
$1.5B/$1.5B
Q1 2026
EPS
$1.46/$1.29
Revenue
$1.5B/$1.5B
Q2 2026
EPS
$1.60/$1.51
Revenue
$1.6B/$1.6B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $1.40/$1.23 | +13.8% | $1.5B/$1.4B | +2.1% |
| Q4 2025 | $1.23/$1.19 | +3.4% | $1.5B/$1.5B | -4.1% |
| Q1 2026 | $1.46/$1.29 | +13.2% | $1.5B/$1.5B | +0.3% |
| Q2 2026 | $1.60/$1.51 | +6.0% | $1.6B/$1.6B | +1.2% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$6.6B
+8.8% YoY
FY2
$7.1B
+7.0% YoY
EPS Outlook
FY1
$6.16
+1.7% YoY
FY2
$6.40
+4.0% YoY
Trailing FCF (TTM)$172M
FCF Margin: 2.8%
Next Earnings
August 3, 2026
Expected EPS
$1.48
Expected Revenue
$1.6B
EHC beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
EHC Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $5.9B
Product Mix
Latest annual revenue by segment or product family
Inpatient
97.0%
+10.1% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
Segment breakdown not available for this company.
Inpatient is the largest disclosed segment at 97.0% of FY 2025 revenue, up 10.1% YoY.
EHC Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Cheap versus peers
Fair value est. $131 — implies +34.1% from today's price.
Upside to Fair Value
34.1%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
EHC
17.7x
vs
S&P 500
24.4x
28% discount
vs Healthcare Trailing P/E
EHC
17.7x
vs
Healthcare
22.1x
20% discount
vs EHC 5Y Avg P/E
Today
17.7x
vs
5Y Average
18.8x
6% discount
Forward PE
16.3x
S&P 500
18.8x
-13%
Healthcare
18.3x
-11%
5Y Avg
—
—
Trailing PE
17.7x
S&P 500
24.4x
-28%
Healthcare
22.1x
-20%
5Y Avg
18.8x
-6%
PEG Ratio
1.24x
S&P 500
1.66x
-25%
Healthcare
1.59x
-22%
5Y Avg
—
—
EV/EBITDA
8.9x
S&P 500
15.2x
-41%
Healthcare
14.2x
-37%
5Y Avg
9.0x
-1%
Price/FCF
22.2x
S&P 500
20.7x
+7%
Healthcare
18.5x
+20%
5Y Avg
31.4x
-29%
Price/Sales
1.6x
S&P 500
3.1x
-47%
Healthcare
2.6x
-38%
5Y Avg
1.5x
+7%
Dividend Yield
0.71%
S&P 500
1.91%
-63%
Healthcare
1.50%
-53%
5Y Avg
1.20%
-41%
| Metric | EHC | S&P 500 | Healthcare | 5Y Avg EHC |
|---|---|---|---|---|
| Forward PE | 16.3x | 18.8x-13% | 18.3x-11% | — |
| Trailing PE | 17.7x | 24.4x-28% | 22.1x-20% | 18.8x |
| PEG Ratio | 1.24x | 1.66x-25% | 1.59x-22% | — |
| EV/EBITDA | 8.9x | 15.2x-41% | 14.2x-37% | 9.0x |
| Price/FCF | 22.2x | 20.7x | 18.5x+20% | 31.4x-29% |
| Price/Sales | 1.6x | 3.1x-47% | 2.6x-38% | 1.5x |
| Dividend Yield | 0.71% | 1.91% | 1.50% | 1.20% |
EHC trades above S&P 500 benchmarks on 0 of 6 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolEHC Financial Health
Verdict
Adequate
EHC 13.9% ROIC signals a durable competitive advantage — returns 2.3% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$6.1B
Revenue Growth
TTM vs prior year
+10.0%
Gross Margin
Gross profit as a share of revenue
58.8%
Operating Margin
Operating income divided by revenue
16.8%
Net Margin
Net income divided by revenue
10.0%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$6.06
Free Cash Flow (TTM)
Cash generation after capex
$172M
FCF Margin
FCF as share of revenue — the primary cash quality signal
2.8%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
13.9%
ROA
Return on assets, trailing twelve months
8.7%
Cash & Equivalents
Liquid assets on the balance sheet
$103M
Net Debt
Total debt minus cash
$2.6B
Debt Serviceability
Net debt as a multiple of annual free cash flow
15.1× FCF
~15.1 years to full repayment at current FCF run-rate
ROE
Return on equity, trailing twelve months
18.9%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
2.3%
Dividend
0.7%
Buyback
1.6%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$158M
Dividend / Share
Annualized trailing dividend per share
$0.70
Payout Ratio
Share of earnings distributed as dividends
12.6%
Shares Outstanding
Declining as buybacks retire shares
99M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageEHC Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated June 18, 2026
High Risk
Regulatory Risks
Concerns about federal deficit and national debt levels may lead to unfavorable reimbursement policies and other regulatory challenges.
High Risk
Volume Softness
Recent volume challenges raise doubts about the company's ability to meet growth expectations.
Medium
Systemic Vulnerabilities
Broader systemic issues in healthcare investing, including regulatory shifts and opaque governance, pose long-term risks.
Medium
Misaligned Incentives
Encompass Health's troubles stem from a confluence of factors, including short-termism and governance issues.
Lower
Valuation Uncertainty
Bear case price target of $77 suggests potential downside risk if growth expectations are not met.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why EHC Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated June 18, 2026
Undervalued stock potential
The intrinsic value for Encompass Health Corp is estimated at $111.33, suggesting the stock is undervalued by 11% based on the Base Case analysis.
Strong earnings performance
Encompass Health reported a 7.15% rise in premarket trading following its first-quarter 2026 earnings, indicating strong financial performance.
Dividend payout confirmation
The company confirmed a quarterly cash dividend of $0.19 per share, demonstrating its commitment to returning value to shareholders.
Market leadership in healthcare
Encompass Health operates in the Healthcare sector, specifically Medical Care Facilities, and is a market leader with a strong fundamentals-based investment case.
Hyper-growth company potential
The bull case highlights Encompass Health as a profitable, hyper-growth company with significant user base potential.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
EHC Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$98.03
52W Range Position
15%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$92.77
+5.7% from the low
52-Week High
$127.99
-23.4% from the high
1 Month
-7.61%
3 Month
-1.66%
YTD
-7.8%
1 Year
-18.1%
3Y CAGR
+15.0%
5Y CAGR
+9.1%
10Y CAGR
+11.9%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
EHC vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
16.3x
vs 16.5x median
-1% below peer median
Revenue Growth
+8.8%
vs +7.7% median
+14% above peer median
Net Margin
10.0%
vs 2.4% median
+315% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
EHC EHC Encompass Health Corporation | $9.7B | 16.3x | +8.8% | 10.0% | Buy | +48.9% |
USP USPH U.S. Physical Therapy, Inc. | $964M | 21.9x | +11.8% | 1.5% | Buy | +51.6% |
SEM SEM Select Medical Holdings Corporation | $2.1B | 13.6x | +2.4% | 2.4% | Hold | +7.3% |
ENS ENSG The Ensign Group, Inc. | $9.0B | 20.3x | +10.1% | 6.9% | Buy | +44.7% |
ACH ACHC Acadia Healthcare Company, Inc. | $2.3B | 16.5x | +7.7% | -32.8% | Buy | +13.9% |
UHS UHS Universal Health Services, Inc. | $8.8B | 6.0x | +7.4% | 8.6% | Hold | +53.0% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
EHC Dividend and Capital Return
EHC returns capital mainly through $158M/year in buybacks (1.6% buyback yield), with a modest 0.71% dividend — combining for 2.3% total shareholder yield.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
2.3%
Dividend + buyback return per year
Buyback Yield
1.6%
Dividend Yield
0.71%
Payout Ratio
12.6%
How EHC Splits Its Return
Div 0.71%
Buyback 1.6%
Dividend 0.71%Buybacks 1.6%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$0.70
Growth Streak
Consecutive years of dividend increases
2Y
3Y Div CAGR
-4.5%
5Y Div CAGR
-4.7%
Ex-Dividend Date
—
Payment Cadence
Quarterly
5 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$158M
Estimated Shares Retired
2M
Approx. Share Reduction
1.6%
Shares Outstanding
Current diluted share count from the screening snapshot
99M
At 1.6%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.57 | — | — | — |
| 2025 | $0.70 | +48.9% | 1.5% | 2.1% |
| 2024 | $0.47 | -21.7% | 0.3% | 1.0% |
| 2023 | $0.60 | -25.3% | 0.1% | 1.0% |
| 2022 | $0.80 | -9.9% | 0.1% | 1.8% |
FAQ
7 questionsEHC Investor Questions
Common questions answered from live analyst data and company financials.
01Is Encompass Health Corporation (EHC) stock a buy or sell in 2026?
Encompass Health Corporation (EHC) is rated Buy by Wall Street analysts as of 2026. Of 26 analysts covering the stock, 21 rate it Buy or Strong Buy, 4 rate it Hold, and 1 rate it Sell or Strong Sell. The consensus 12-month price target is $146, implying +48.9% from the current price of $98. The bear case scenario is $74 and the bull case is $155.
02What is the EHC stock price target for 2026?
The Wall Street consensus price target for EHC is $146 based on 26 analyst estimates. The high-end target is $152 (+55.1% from today), and the low-end target is $140 (+42.8%). The base case model target is $117.
03Is Encompass Health Corporation (EHC) stock overvalued in 2026?
EHC trades at 16.3x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals cheap versus peers. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Encompass Health Corporation (EHC) stock in 2026?
The primary risks for EHC in 2026 are: (1) Regulatory Risks — Concerns about federal deficit and national debt levels may lead to unfavorable reimbursement policies and other regulatory challenges. (2) Volume Softness — Recent volume challenges raise doubts about the company's ability to meet growth expectations. (3) Systemic Vulnerabilities — Broader systemic issues in healthcare investing, including regulatory shifts and opaque governance, pose long-term risks. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Encompass Health Corporation's revenue and earnings forecast?
Analyst consensus estimates EHC will report consensus revenue of $6.6B (+8.8% year-over-year) and EPS of $6.16 (+1.7% year-over-year) for the upcoming fiscal year. The following year, analysts project $7.1B in revenue.
06When does Encompass Health Corporation (EHC) report its next earnings?
Encompass Health Corporation is expected to report its next earnings on approximately 2026-08-03. Consensus expects EPS of $1.48 and revenue of $1.6B. Over recent quarters, EHC has beaten EPS estimates 100% of the time.
07How much free cash flow does Encompass Health Corporation generate?
Encompass Health Corporation (EHC) generated $172M in free cash flow over the trailing twelve months — a free cash flow margin of 2.8%. EHC returns capital to shareholders through dividends (0.7% yield) and share repurchases ($158M TTM).