QualityDipStocks / Health Care · Hospitals
Encompass Health EHC
Outside our quality screen, so we don’t track its dips. It’s at its 52-week high.
Outside our quality screen, trading above our fair value estimate.
- Fair value est.
- $102.03−25%
- Market Value
- forming
- Off 52-wk high
- at the high
- Risk vs market
- Lowbeta −0.04
4 bullish · 5 bearish See why
Key levels
Every level vs today’s $135.90
- 52-wk lowlowest close, 1 year$93.83−31.0%
- Fair value est.base case$102.03−24.9%
- 52-wk highhighest close, 1 year$135.90at the price
- PriceFri Oct 30 close$135.90you are here
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 10.9% ±2 points. Bear = 10.5% and 8.9%; bull = 8.5% and 12.9% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price sits inside the range.
What the price implies To be worth today’s price, EHC’s free cash flow would need to grow about 16% a year for five years; our estimate uses 11%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much EHC moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 2.4× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- -0.04
- Volatility
- 31% vs 13% SPY
- Correlation SPY
- −0.02
- Correlation QQQ
- −0.16
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 4 of 5
ProfitabilityReturn on equity of 25% over the last 12 months.
GrowthDiluted EPS grew 24% to $5.54 in FY2025.
Cash returnsShare count down 2.2% in a year: $247M of buybacks over 12 months.
GrowthSales grew 9% to $6.2B over the last 12 months vs the 12 months before (SEC filings).
Top bearish points 5 of 5
ValuationOur DCF fair value estimate is $102.03, 25% below the price.
ProfitabilityOperating margin narrowed to 12.4% in FY2022 from 15.8% in FY2020 (SEC filings).
Balance sheetDebt / equity of 1.0×, above the 0.7× median for the 67 Health Care companies we cover.
ValuationFree-cash-flow yield of 3.0%, below the 4.0% median for the 102 Health Care companies we cover.
Cash returnsDividend yield of 0.6%, below the 1.1% median for the 47 Health Care companies we cover.
Who’s talking about it
Notable investors, executives, analysts and public figures on Encompass Health in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Hospitals
All fundamentals
P/E 21.9 · FCF yield 3.0% · ROE 25%
Valuation
- P/E
- 21.9×Health Care median 29.2×
- Price / FCF
- 32.9×
- FCF yield
- 3.0%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 2.19×
- Price / book
- 5.23×
- Market cap
- $13.6Bprice × diluted shares
- Enterprise value
- $16.1B
Growth
- Revenue, 12 months
- $6.2B
- Sales growth, 12 months
- +9.5%vs the 12 months before
- Sales growth, 3 yrs
- +10.9%/yrfrom FY2022
- Diluted EPS, 12 months
- $6.14
- EPS growth, last FY
- +24.2%
- Net income, 12 months
- $619M
- Net income growth
- +19%12 months vs before
Profitability
- Gross margin
- n/agross profit isn't reported (common for service and financial companies)
- Operating margin
- n/anot reported in its SEC filings
- Net margin
- 10.0%
- FCF margin
- 6.7%
- Return on equity
- 25%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $108M
- Total debt
- $2.6B
- Net cash
- −$2.5B
- Debt / equity
- 1.01×
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $413M
- FCF growth, 12 months
- −6%
- Dividend yield
- 0.55%$75M paid
- Payout ratio
- 12%
- Buybacks, 12 months
- $247M1.8% of market cap
- Share count, 1 year
- −2.2%diluted shares vs a year ago
- Stock-based comp
- $58M
Trailing 12 months to Jun 30, 2026; balance sheet at Jun 30, 2026. From Encompass Health’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $102.03 · FCF value $70.56
Assumes 10.9% growth for 5 years (revenue grew 10.9% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $4.13 a share (trailing 12 months to Jun 30, 2026), from the 10-Q filed Aug 7, 2026.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only run on companies that pass our quality screen.
Momentum & 52-week range
RSI 69 · 5 days +9.5%
The business
FCF $0.3B · Sales +9%
- Free cash flow, 12 months$0.3B
- Free-cash-flow yield2.1%
- Free-cash-flow margin4%
- Gross margin44%
- Operating margin18%
- Return on invested capital18%
- Return on equity25%
- Sales growth (latest quarter vs year-ago quarter)+9%
- Net debt / EBITDA1.8×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
EHC is outside our quality screen
One text when a published rule fires on one of the 333 quality companies we track: the ticker, the price, the stop and a link to the numbers. Nothing else.