Encompass Health Corporation

NYSE:EHC Stock Report

Market Cap: US$7.8b

Encompass Health Valuation

Is EHC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of EHC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: EHC ($77.71) is trading above our estimate of fair value ($31.56)

Significantly Below Fair Value: EHC is trading above our estimate of fair value.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for EHC?

Other financial metrics that can be useful for relative valuation.

EHC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.4x
Enterprise Value/EBITDA11.2x
PEG Ratio2.2x

Price to Earnings Ratio vs Peers

How does EHC's PE Ratio compare to its peers?

The above table shows the PE ratio for EHC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average21.1x
THC Tenet Healthcare
17.2x-7.1%US$10.5b
ENSG Ensign Group
34.1x17.9%US$7.1b
UHS Universal Health Services
17x12.0%US$12.2b
SEM Select Medical Holdings
16.1x14.2%US$3.8b
EHC Encompass Health
21.5x10.0%US$7.8b

Price-To-Earnings vs Peers: EHC is expensive based on its Price-To-Earnings Ratio (21.5x) compared to the peer average (21.1x).


Price to Earnings Ratio vs Industry

How does EHC's PE Ratio compare vs other companies in the US Healthcare Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a12.3%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a12.3%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: EHC is good value based on its Price-To-Earnings Ratio (21.5x) compared to the US Healthcare industry average (24.2x).


Price to Earnings Ratio vs Fair Ratio

What is EHC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

EHC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio21.5x
Fair PE Ratio24.5x

Price-To-Earnings vs Fair Ratio: EHC is good value based on its Price-To-Earnings Ratio (21.5x) compared to the estimated Fair Price-To-Earnings Ratio (24.5x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst EHC forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$77.71
US$86.20
+10.9%
4.4%US$95.00US$82.00n/a10
Mar ’25US$74.20
US$85.22
+14.9%
3.0%US$90.00US$82.00n/a9
Feb ’25US$73.00
US$81.44
+11.6%
4.0%US$85.00US$77.00n/a9
Jan ’25US$66.72
US$81.11
+21.6%
3.7%US$85.00US$77.00n/a9
Dec ’24US$66.39
US$81.11
+22.2%
3.7%US$85.00US$77.00n/a9
Nov ’24US$62.56
US$81.11
+29.7%
3.7%US$85.00US$77.00n/a9
Oct ’24US$67.16
US$80.80
+20.3%
5.2%US$85.00US$71.00n/a10
Sep ’24US$70.99
US$80.00
+12.7%
5.3%US$85.00US$71.00n/a11
Aug ’24US$65.96
US$73.91
+12.1%
6.5%US$80.00US$61.00n/a11
Jul ’24US$67.71
US$73.91
+9.2%
6.5%US$80.00US$61.00n/a11
Jun ’24US$62.30
US$73.55
+18.1%
6.3%US$80.00US$61.00n/a11
May ’24US$64.28
US$73.36
+14.1%
6.3%US$80.00US$61.00n/a11
Apr ’24US$54.10
US$69.73
+28.9%
6.7%US$75.00US$57.00n/a11
Mar ’24US$56.21
US$71.00
+26.3%
3.6%US$75.00US$66.00US$74.2010
Feb ’24US$63.21
US$66.70
+5.5%
5.2%US$72.00US$62.00US$73.0010
Jan ’24US$59.81
US$64.00
+7.0%
6.2%US$72.00US$58.00US$66.7210
Dec ’23US$57.76
US$63.50
+9.9%
5.9%US$72.00US$58.00US$66.3910
Nov ’23US$55.19
US$63.45
+15.0%
5.6%US$72.00US$58.00US$62.5611
Oct ’23US$45.23
US$63.00
+39.3%
3.5%US$66.00US$59.00US$67.1610
Sep ’23US$48.69
US$63.10
+29.6%
3.4%US$66.00US$59.00US$70.9910
Aug ’23US$50.69
US$59.07
+16.5%
9.2%US$65.20US$52.00US$65.963
Jul ’23US$46.54
US$78.58
+68.9%
4.6%US$83.00US$70.00US$67.7112
Jun ’23US$64.68
US$82.25
+27.2%
2.8%US$85.00US$79.00US$62.3012
May ’23US$68.83
US$83.25
+21.0%
7.9%US$104.00US$79.00US$64.2812
Apr ’23US$71.65
US$81.42
+13.6%
8.5%US$104.00US$77.00US$54.1012
Mar ’23US$66.39
US$81.08
+22.1%
8.8%US$104.00US$75.00US$56.2112

Analyst Forecast: Target price is less than 20% higher than the current share price.


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