Encompass Health (EHC) just opened its new 50 bed inpatient rehabilitation hospital in Lake Worth, a meaningful capacity boost that quietly underscores how the company is leaning into long term demand for post acute care.
See our latest analysis for Encompass Health.
The Lake Worth opening lands at a time when Encompass Health’s share price, now around $107.59, has cooled from its recent highs. The stock shows a 30 day share price return of minus 5.17 percent, while a 3 year total shareholder return of 92 percent still signals strong long term momentum.
If this expansion has you thinking about other healthcare names riding similar structural tailwinds, you might also want to explore healthcare stocks as a way to spot more potential opportunities.
With shares trading roughly 30 percent below consensus targets despite solid revenue and earnings growth, Encompass Health looks anything but exhausted. The key question is whether this recent pullback represents a genuine buying opportunity or whether the market is already pricing in its next leg of growth.
Most Popular Narrative: 23.3% Undervalued
With the most followed narrative putting fair value well above the current $107.59 share price, Encompass Health is framed as meaningfully mispriced, not just modestly cheap.
Sustained execution of the company's high return de novo hospital and bed addition strategy, combined with a robust pipeline in underserved/new markets (and CON relaxation in key states), is set to drive outsized same store and total discharge growth, translating to accelerating revenue and EBITDA expansion relative to market expectations.
Want to see why this story leans on powerful volume growth and richer margins, yet still assumes a lower earnings multiple ahead? The full narrative reveals the exact growth runway and profitability lift that support this higher fair value, and how those forecasts translate into a premium valuation framework over time.
Result: Fair Value of $140.33 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, persistent labor shortages and elevated capital spending on new hospitals could pressure margins and returns. This could quickly challenge today’s upbeat growth narrative.
Find out about the key risks to this Encompass Health narrative.
Build Your Own Encompass Health Narrative
If you want to dig into the numbers yourself rather than lean on this view, you can build a customised thesis in just a few minutes using Do it your way.
A great starting point for your Encompass Health research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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