Encompass Health Corporation Common Stock (EHC)

FairStock Score: 63/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett/Graham-style investor, I look for an understandable business, durable economics, and a price that leaves room for error. Encompass Health operates inpatient rehabilitation hospitals, a service with recurring need. The filed record shows steady progress: in fiscal 2023, the year ended 2023-12-31, revenue was $4.8B, net income $352.0M, and diluted EPS $3.47; in fiscal 2024, the year ended 2024-12-31, revenue was $5.4B, net income $455.7M, and EPS $4.46; in fiscal 2025, the year ended 2025-12-31, revenue was $5.9B, net income $566.2M, and EPS $5.54. In the latest filed quarter, fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $1.6B, net income $153.9M, and diluted EPS $1.54, versus fiscal Q2 2025, the quarter ended 2025-06-30, at $1.5B, $142.1M, and $1.39. FairStock categorizes it as a STALWART because profit grew 14.8% a year over five years and revenue 10.7%. That is a fine record. FairStock's calculations show ROE 24.97%, but ROCE 9.80%, D/E 0.82, Piotroski 6/9, and Altman Z 2.51—good, not fortress-like. At the 2026-10-13 close of $124.33, FairStock's P/E is 20.76, P/B 4.73, PEG 1.00, FCF yield 3.4%, and Graham Number $59.53, implying a -108.85% margin of safety. The price is not cheap by Graham's arithmetic; it asks for continued growth. I like the business, but I would want a wider discount before calling it a true value.

In plain English: Encompass Health runs inpatient rehabilitation hospitals where people recover from strokes, injuries, and other serious conditions. The business has been growing sales and profits and earns a strong return on shareholders' money, so it looks financially solid. At $124.33 on 2026-10-13, the price looks full compared with conservative measures of value, even though growth is steady.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer