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

Shares of Encompass Health Corporation (NYSE:EHC) gapped up prior to trading on Thursday following a stronger than expected earnings report. The stock had previously closed at $110.90, but opened at $124.81. Encompass Health shares last traded at $123.3670, with a volume of 165,012 shares.

The company reported $1.55 EPS for the quarter, topping analysts’ consensus estimates of $1.48 by $0.07. Encompass Health had a return on equity of 18.28% and a net margin of 10.04%.The company had revenue of $1.60 billion for the quarter, compared to analyst estimates of $1.57 billion. During the same period in the previous year, the firm earned $1.40 earnings per share. The firm’s quarterly revenue was up 9.6% on a year-over-year basis. Encompass Health has set its FY 2026 guidance at 6.020-6.250 EPS.

Encompass Health Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, October 15th. Stockholders of record on Thursday, October 1st will be paid a $0.21 dividend. The ex-dividend date of this dividend is Thursday, October 1st. This represents a $0.84 dividend on an annualized basis and a dividend yield of 0.7%. This is an increase from Encompass Health’s previous quarterly dividend of $0.19. Encompass Health’s payout ratio is currently 14.02%.

Analyst Upgrades and Downgrades

A number of analysts have weighed in on EHC shares. Weiss Ratings downgraded Encompass Health from a “buy (b-)” rating to a “hold (c+)” rating in a report on Friday, June 26th. Barclays boosted their target price on shares of Encompass Health from $140.00 to $144.00 and gave the company an “overweight” rating in a research report on Thursday. TD Cowen began coverage on shares of Encompass Health in a research note on Thursday, May 28th. They set a “buy” rating and a $125.00 target price on the stock. Leerink Partners set a $152.00 price target on shares of Encompass Health in a research note on Friday, May 22nd. Finally, Wall Street Zen upgraded shares of Encompass Health from a “hold” rating to a “buy” rating in a report on Saturday, May 2nd. One equities research analyst has rated the stock with a Strong Buy rating, six have issued a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat.com, Encompass Health currently has an average rating of “Moderate Buy” and an average price target of $144.43.

Insider Activity

In other news, EVP Patrick William Tuer sold 682 shares of the business’s stock in a transaction dated Monday, May 11th. The shares were sold at an average price of $104.56, for a total transaction of $71,309.92. Following the completion of the sale, the executive vice president directly owned 24,755 shares of the company’s stock, valued at $2,588,382.80. The trade was a 2.68% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. 1.80% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Encompass Health

A number of hedge funds have recently added to or reduced their stakes in EHC. Oppenheimer Asset Management Inc. purchased a new stake in shares of Encompass Health in the second quarter worth approximately $2,620,000. Trust Point Inc. purchased a new position in shares of Encompass Health during the second quarter valued at approximately $211,000. Reinhart Partners LLC. raised its position in Encompass Health by 1.9% in the 2nd quarter. Reinhart Partners LLC. now owns 435,362 shares of the company’s stock valued at $44,008,000 after buying an additional 8,162 shares during the last quarter. GAMMA Investing LLC boosted its holdings in Encompass Health by 2.7% during the 2nd quarter. GAMMA Investing LLC now owns 3,969 shares of the company’s stock worth $401,000 after acquiring an additional 106 shares during the last quarter. Finally, Harbor Investment Advisory LLC bought a new stake in shares of Encompass Health in the 2nd quarter worth $56,000. Institutional investors and hedge funds own 97.25% of the company’s stock.

Encompass Health Stock Performance

The company has a market cap of $12.18 billion, a PE ratio of 20.56, a P/E/G ratio of 2.41 and a beta of 0.72. The company’s fifty day moving average price is $106.14 and its 200 day moving average price is $104.27. The company has a debt-to-equity ratio of 0.76, a current ratio of 1.17 and a quick ratio of 1.17.

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.