Encompass Health (NYSE:EHC) Stock Price Up 6.6% on Earnings Beat

Key Points

• Earnings beat drove the rally: Q1 EPS of $1.60 topped the $1.51 consensus and revenue was $1.59B vs. $1.57B expected, lifting the stock about 6.6% to roughly $106.57 and management set FY2026 EPS guidance of 5.89–6.11.
• Dividend and profitability: The company paid a $0.19 quarterly dividend ($0.76 annualized, ~0.7% yield) with a 13.7% payout ratio, while reporting a 9.54% net margin and 18.20% return on equity.
• Insider selling but bullish analyst view: CEO Mark J. Tarr sold 150,000 shares (~$16.7M) earlier this year and insiders now own 1.8% of shares, yet analysts average a "Buy" rating with a consensus price target of $146.33 (Barclays at $153).

Shares of Encompass Health Corporation (NYSE:EHC - Get Free Report) rose 6.6% on Friday following a better than expected earnings announcement. The stock traded as high as $107.97 and last traded at $106.5660. Approximately 168,392 shares changed hands during mid-day trading, a decline of 85% from the average daily volume of 1,143,215 shares. The stock had previously closed at $100.00.

The company reported $1.60 earnings per share for the quarter, beating analysts' consensus estimates of $1.51 by $0.09. Encompass Health had a net margin of 9.54% and a return on equity of 18.20%. The business had revenue of $1.59 billion during the quarter, compared to the consensus estimate of $1.57 billion. During the same quarter last year, the firm earned $1.37 earnings per share. The firm's revenue for the quarter was up 9.0% compared to the same quarter last year. Encompass Health has set its FY 2026 guidance at 5.890-6.110 EPS.

Encompass Health Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Wednesday, April 15th. Stockholders of record on Wednesday, April 1st were given a $0.19 dividend. This represents a $0.76 dividend on an annualized basis and a dividend yield of 0.7%. The ex-dividend date of this dividend was Wednesday, April 1st. Encompass Health's dividend payout ratio (DPR) is 13.72%.

Analysts Set New Price Targets

A number of research analysts have recently commented on the stock. Wall Street Zen downgraded shares of Encompass Health from a "buy" rating to a "hold" rating in a research report on Saturday, April 11th. Barclays lifted their price objective on shares of Encompass Health from $150.00 to $153.00 and gave the company an "overweight" rating in a research report on Friday, February 6th. Two equities research analysts have rated the stock with a Strong Buy rating, six have given a Buy rating and one has issued a Hold rating to the company's stock. According to data from MarketBeat, Encompass Health has an average rating of "Buy" and a consensus price target of $146.33.

Insider Activity

In related news, CEO Mark J. Tarr sold 150,000 shares of Encompass Health stock in a transaction dated Wednesday, February 11th. The shares were sold at an average price of $111.64, for a total transaction of $16,746,000.00. Following the completion of the sale, the chief executive officer owned 377,070 shares of the company's stock, valued at approximately $42,096,094.80. The trade was a 28.46% decrease in their position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, Treasurer Edmund Fay sold 11,937 shares of Encompass Health stock in a transaction dated Monday, March 9th. The stock was sold at an average price of $107.00, for a total transaction of $1,277,259.00. Following the sale, the treasurer directly owned 89,325 shares of the company's stock, valued at $9,557,775. The trade was a 11.79% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders own 1.80% of the company's stock.

Institutional Trading of Encompass Health

Hedge funds and other institutional investors have recently bought and sold shares of the business. Citizens National Bank Trust Department acquired a new stake in Encompass Health in the 3rd quarter worth about $26,000. First Horizon Corp acquired a new stake in Encompass Health in the 3rd quarter worth about $34,000. Westside Investment Management Inc. raised its stake in Encompass Health by 56.7% in the 3rd quarter. Westside Investment Management Inc. now owns 279 shares of the company's stock worth $35,000 after purchasing an additional 101 shares in the last quarter. Assetmark Inc. raised its stake in Encompass Health by 88.1% in the 3rd quarter. Assetmark Inc. now owns 299 shares of the company's stock worth $38,000 after purchasing an additional 140 shares in the last quarter. Finally, Root Financial Partners LLC acquired a new stake in Encompass Health in the 3rd quarter worth about $39,000. Institutional investors and hedge funds own 97.25% of the company's stock.

Encompass Health Stock Up 6.1%

The company has a current ratio of 1.08, a quick ratio of 1.08 and a debt-to-equity ratio of 0.76. The firm's 50 day simple moving average is $103.05 and its two-hundred day simple moving average is $107.65. The firm has a market cap of $10.55 billion, a price-to-earnings ratio of 19.13, a PEG ratio of 1.97 and a beta of 0.75.

About Encompass Health

Encompass Health Corporation is a leading provider of post‐acute healthcare services in the United States, operating a comprehensive network of inpatient rehabilitation hospitals and home health and hospice agencies. Its inpatient rehabilitation hospitals offer intensive therapy programs for patients recovering from conditions such as stroke, brain injury, spinal cord injury, cardiac and pulmonary disorders, and orthopedic procedures. Through its home health segment, Encompass Health delivers skilled nursing, physical therapy, occupational therapy and speech therapy to patients in the comfort of their homes, while its hospice services provide end‐of‐life care focused on symptom management and emotional support for patients and families.

Founded in 1984 as HealthSouth Corporation and rebranded as Encompass Health in 2018, the company has grown organically and through acquisitions to serve patients across more than 30 states.

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