The Ensign Group Inc. Common Stock (ENSG)

FairStock Score: 47/100 — MIXED

Key Financials

Strengths

• Generates $281 million in annual free cash flow (2.5% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 16.9% above cost of capital
• Revenue growth of 20.2% demonstrates strong top-line momentum
• Established organization with 46,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($71) with negative 166% margin of safety—limited downside protection

AI Analysis

The Ensign Group Inc. Common Stock is a mid-cap healthcare company valued at $11.0 billion. The business generates $5.1 billion in annual revenue with a 1.9% net margin and $281 million in free cash flow. From a quality standpoint, The shows solid Piotroski F-Score of 7/9 and Altman Z-Score of 2.9 in the grey zone. On valuation, the stock is trading at a premium 32.4x earnings, with trades far above its Graham Number ($71) with no margin of safety. Growth dynamics show revenue growing at 20.2% and profit growth of 19.8%. Our composite FairStock Score of 47/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The's 20% revenue growth trajectory could accelerate as it captures additional market share in the healthcare sector. With $281 million in annual free cash flow (2.5% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 32x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer