What Does The Ensign Group, Inc.'s (NASDAQ:ENSG) Share Price Indicate?

The Ensign Group, Inc. (NASDAQ:ENSG), is not the largest company out there, but it saw a significant share price rise of 27% in the past couple of months on the NASDAQGS. The company is now trading at yearly-high levels following the recent surge in its share price. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Ensign Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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What Is Ensign Group Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 4.50% above our intrinsic value, which means if you buy Ensign Group today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $165.07, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Ensign Group has a low beta, which suggests its share price is less volatile than the wider market.

Check out our latest analysis for Ensign Group

What kind of growth will Ensign Group generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Ensign Group's earnings over the next few years are expected to increase by 33%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? ENSG’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on ENSG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Diving deeper into the forecasts for Ensign Group mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.

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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.