Encompass Health Corporation

NYSE:EHC Stock Report

Market Cap: US$9.5b

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 ($94.45) is trading above our estimate of fair value ($45.71)

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?

Key metric: As EHC is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for EHC. This is calculated by dividing EHC's market cap by their current earnings.
What is EHC's PE Ratio?
PE Ratio22.1x
EarningsUS$431.50m
Market CapUS$9.52b

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 Average15x
UHS Universal Health Services
11.6x8.3%US$11.9b
THC Tenet Healthcare
3.9x-39.2%US$12.3b
ENSG Ensign Group
31.9x18.1%US$7.7b
ACHC Acadia Healthcare Company
12.5x10.6%US$3.5b
EHC Encompass Health
22.1x9.6%US$9.5b

Price-To-Earnings vs Peers: EHC is expensive based on its Price-To-Earnings Ratio (22.1x) compared to the peer average (15x).

Price to Earnings Ratio vs Industry

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

5 CompaniesPrice / EarningsEstimated GrowthMarket Cap
THC Tenet Healthcare
3.9x-39.2%US$12.31b
NEUE NeueHealth
1.1xn/aUS$31.53m
IDXG Interpace Biosciences
2.6xn/aUS$12.50m
FZMD Fuse Medical
2.2xn/aUS$8.67m
EHC 22.1xIndustry Avg. 21.9xNo. of Companies10PE01632486480+
5 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: EHC is expensive based on its Price-To-Earnings Ratio (22.1x) compared to the US Healthcare industry average (21.9x).

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 Ratio22.1x
Fair PE Ratio26.1x

Price-To-Earnings vs Fair Ratio: EHC is good value based on its Price-To-Earnings Ratio (22.1x) compared to the estimated Fair Price-To-Earnings Ratio (26.1x).

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$94.45
US$116.50
+23.3%
3.4%US$125.00US$110.00n/a12
Dec ’25US$102.94
US$115.67
+12.4%
2.6%US$120.00US$110.00n/a12
Nov ’25US$98.91
US$115.25
+16.5%
3.4%US$120.00US$105.00n/a12
Oct ’25US$95.74
US$102.73
+7.3%
4.6%US$110.00US$95.00n/a11
Sep ’25US$93.05
US$100.91
+8.4%
4.4%US$109.00US$95.00n/a11
Aug ’25US$93.02
US$99.18
+6.6%
5.4%US$113.00US$95.00n/a11
Jul ’25US$85.36
US$97.40
+14.1%
4.0%US$108.00US$95.00n/a10
Jun ’25US$86.39
US$96.50
+11.7%
4.0%US$108.00US$94.00n/a10
May ’25US$82.88
US$94.91
+14.5%
5.8%US$108.00US$83.00n/a11
Apr ’25US$83.23
US$87.20
+4.8%
6.3%US$101.00US$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$77.00US$102.949
Nov ’24US$62.56
US$81.11
+29.7%
3.7%US$85.00US$77.00US$98.919
Oct ’24US$67.16
US$80.80
+20.3%
5.2%US$85.00US$71.00US$95.7410
Sep ’24US$70.99
US$80.00
+12.7%
5.3%US$85.00US$71.00US$93.0511
Aug ’24US$65.96
US$73.91
+12.1%
6.5%US$80.00US$61.00US$93.0211
Jul ’24US$67.71
US$73.91
+9.2%
6.5%US$80.00US$61.00US$85.3611
Jun ’24US$62.30
US$73.55
+18.1%
6.3%US$80.00US$61.00US$86.3911
May ’24US$64.28
US$73.36
+14.1%
6.3%US$80.00US$61.00US$82.8811
Apr ’24US$54.10
US$69.73
+28.9%
6.7%US$75.00US$57.00US$83.2311
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

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/22 02:08
End of Day Share Price 2024/12/20 00:00
Earnings2024/09/30
Annual Earnings2023/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

Encompass Health Corporation is covered by 38 analysts. 12 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
null RESEARCH DEPARTMENTAvondale Partners
Matthew GillmorBaird
Ishan MajumdarBaptista Research