Encompass Health CorporationEHC
NYSE•Healthcare•Medical Care Facilities
Encompass Health Corporation operates inpatient rehabilitation hospitals in the United States and Puerto Rico. The company offers specialized rehabilitative treatment, using technology and therapy, on an inpatient basis for patients recovering from a major injury or illness and seeking to regain functional ability, independence, and quality of life; medical, nursing, therapy, and ancillary services; and rehabilitative care to patients who are recovering from conditions, such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. It offers services through the Medicare program to the federal government, managed care plans and private insurers, state governments, and other patients. The company was formerly known as HealthSouth Corporation and changed its name to Encompass Health Corporation in January 2018. Encompass Health Corporation was incorporated in 1984 and is based in Birmingham, Alabama.
Encompass Health Corporation (EHC) reported trailing twelve months revenue of $6.07B as of March 2026, a 10.0% increase year-over-year. Quarterly revenue reached $1.59B, reflecting continued top-line momentum.
Encompass Health Corporation generated $795.40M in TTM net income, with quarterly EBITDA of $376.00M. The operating margin expanded from 16.4% to 18.2%, suggesting improving cost efficiency and pricing discipline.
The spread between operating margin (18.2%) and net margin (14.6%) indicates tight cost control with minimal non-operating drag. Net margin has improved from 13.5% a year ago, signaling stronger bottom-line efficiency.
EHC trades at a P/E of 12.2x (below the broader market average) and a P/S of 1.6x. The price-to-book ratio of 3.8x reflects a moderate premium to book value.
The company generated $313.10M in free cash flow over the trailing twelve months, a 8.5% increase year-over-year, indicating cash generation ability. The balance sheet shows $7.31B in total assets with $2.53B in long-term debt against $2.52B in stockholders equity for a debt-to-equity ratio of 1.0. Data based on the most recent quarterly reports.
Competitive analysis based on 21 quarters of fundamental data
Operating margins are expanding at ~15.6%, suggesting durable pricing power and cost discipline.
Consistently high ROE averaging 30.1% suggests a durable competitive advantage and efficient capital allocation.
Free cash flow is consistently positive and growing — a hallmark of a capital-light business that can self-fund growth.
TTM revenue has grown consistently (7 of 7 quarters up), with ~19.6% growth over the period. Strong demand durability.
Data-driven red flags and warnings across 21 quarters
Margins are stable or improving at ~16.5% — no sign of cost or pricing stress.
FCF covers net income by 1.6x on average — earnings are well-supported by cash generation.
D/E ratio is 1.0 — conservative capital structure with low financial risk.
Revenue is stable or growing over recent quarters — demand appears durable.
Free cash flow is consistently positive — the business self-funds without external capital reliance.
Share count is stable — no significant dilution or buyback activity.