Encompass Health (NYSE:EHC) Shares Gap Up After Earnings Beat

Shares of Encompass Health Corporation (NYSE:EHC) gapped up prior to trading on Friday following a better than expected earnings announcement. The stock had previously closed at $99.56, but opened at $115.00. Encompass Health shares last traded at $110.5260, with a volume of 194,168 shares.

The company reported $1.46 earnings per share for the quarter, beating analysts’ consensus estimates of $1.29 by $0.17. The business had revenue of $1.54 billion during the quarter, compared to analyst estimates of $1.54 billion. Encompass Health had a return on equity of 18.50% and a net margin of 9.54%.Encompass Health’s revenue for the quarter was up 9.9% on a year-over-year basis. During the same quarter last year, the company posted $1.17 EPS. Encompass Health has set its FY 2026 guidance at 5.810-6.100 EPS.

Encompass Health News Summary

Here are the key news stories impacting Encompass Health this week:

• Positive Sentiment: Q4 EPS beat — Encompass reported adjusted EPS of $1.46 vs. consensus $1.29, a clear beat that was the primary catalyst for the rally. Earnings Beat Article
• Positive Sentiment: Revenue growth and profitability — Revenue was $1.54B, up ~9.9% year-over-year; net margin (~9.33%) and ROE (~17.8%) show healthy operating leverage in the quarter. Those metrics reinforce the quality of the beat. PR News Release
• Positive Sentiment: FY2026 guidance issued — Management guided FY2026 EPS to $5.810–$6.100 and revenue to $6.4–$6.5B, broadly in line with Street expectations and giving investors a clear framework for 2026. That helped limit post-earnings uncertainty. Guidance Article
• Neutral Sentiment: Revenue met, not exceeded, estimates — while revenue grew y/y, the $1.54B figure was essentially in line with consensus, so the surprise was driven mainly by margin/earnings rather than top-line upside. Metrics vs Estimates
• Neutral Sentiment: Investor materials and call available — management provided a slide deck and held the conference call (transcript available) for additional color on volumes, payor mix and margin outlook; useful for modeling but no new headline surprises. Earnings Call Transcript
• Negative Sentiment: Guidance conservatism at the low end — the EPS guidance lower bound (5.810) is marginally below the consensus cited in some coverage (5.820); some traders may view the range as conservative, so watch guidance execution and quarterly cadence. Guidance Detail

Wall Street Analysts Forecast Growth

A number of research firms recently commented on EHC. Barclays raised their price objective on shares of Encompass Health from $150.00 to $153.00 and gave the stock an “overweight” rating in a research note on Friday. Zacks Research cut Encompass Health from a “strong-buy” rating to a “hold” rating in a research report on Wednesday, November 19th. Raymond James Financial raised Encompass Health to a “strong-buy” rating in a research report on Friday, October 31st. Finally, Wall Street Zen raised Encompass Health from a “hold” rating to a “buy” rating in a research note on Sunday, January 18th. Two investment analysts have rated the stock with a Strong Buy rating, seven have assigned a Buy rating and one has issued a Hold rating to the company. According to data from MarketBeat, the company currently has an average rating of “Buy” and a consensus price target of $143.29.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the company. Citizens National Bank Trust Department bought a new stake in shares of Encompass Health in the 3rd quarter valued at approximately $26,000. First Horizon Corp acquired a new stake in Encompass Health in the third quarter valued at approximately $34,000. WPG Advisers LLC grew its position in Encompass Health by 73.3% in the fourth quarter. WPG Advisers LLC now owns 324 shares of the company’s stock worth $34,000 after acquiring an additional 137 shares in the last quarter. Westside Investment Management Inc. increased its stake in shares of Encompass Health by 56.7% during the 3rd quarter. Westside Investment Management Inc. now owns 279 shares of the company’s stock worth $35,000 after purchasing an additional 101 shares during the last quarter. Finally, Flagship Harbor Advisors LLC bought a new position in shares of Encompass Health during the 4th quarter valued at $37,000. 97.25% of the stock is owned by institutional investors and hedge funds.

Encompass Health Stock Performance

The firm has a market cap of $10.62 billion, a price-to-earnings ratio of 19.05, a price-to-earnings-growth ratio of 1.60 and a beta of 0.73. The firm’s 50 day moving average is $104.26 and its 200-day moving average is $114.41. The company has a debt-to-equity ratio of 0.76, a quick ratio of 1.14 and a current ratio of 1.14.

Encompass Health Company Profile

Encompass Health Corporation is a leading provider of post‐acute healthcare services in the United States, operating a comprehensive network of inpatient rehabilitation hospitals and home health and hospice agencies. Its inpatient rehabilitation hospitals offer intensive therapy programs for patients recovering from conditions such as stroke, brain injury, spinal cord injury, cardiac and pulmonary disorders, and orthopedic procedures. Through its home health segment, Encompass Health delivers skilled nursing, physical therapy, occupational therapy and speech therapy to patients in the comfort of their homes, while its hospice services provide end‐of‐life care focused on symptom management and emotional support for patients and families.

Founded in 1984 as HealthSouth Corporation and rebranded as Encompass Health in 2018, the company has grown organically and through acquisitions to serve patients across more than 30 states.