Encompass Health Corporation research snapshot
EHC AI stock analysis currently reads Encompass Health as the largest U.S. owner and operator of inpatient rehabilitation hospitals, with strong FY2025 growth, a solid Q1 2026 start, raised 2026 guidance, a higher dividend, and a valuation near 19x trailing earnings. At the August 3, 2026 data cutoff, the latest verified close was $111.07 on July 31, 2026, with a market capitalization near $11.02 billion on about 99.2 million shares. Q2 2026 results are scheduled for August 5, 2026, so this snapshot reflects Q1 2026 and FY2025 as the latest reported quarters. The EHC AI stock forecast uses scenario ranges rather than a fixed price promise because Medicare reimbursement, labor costs, discharge growth, de novo bed openings, leverage, and earnings multiples can change the path quickly.
Current price
$111.07
Market cap
$11.02 billion verified market cap
AI score
75 / 100
Rating
Leading inpatient rehab operator with capacity growth, a dividend increase, demographic demand, and Medicare and labor risk
Trend status
Consolidating above the 50-day and 200-day moving averages near $111 as of the August 3, 2026 data cutoff, below its late-2025 peak but holding a positive longer-term trend
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Encompass Health runs specialized inpatient rehabilitation hospitals that treat patients recovering from stroke, neurological injury, orthopedic trauma, and other complex conditions after acute care. | High |
| Moat | The moat comes from national IRF scale, clinical protocols, hospital joint ventures, certificate-of-need positioning, referral relationships, and brand recognition in rehab, but payers and local hospital systems still set pricing and volume terms. | Medium-high |
| Management | CEO Mark Tarr is executing a capacity-led strategy of de novo hospitals, bed additions, joint ventures, free cash flow reinvestment, dividends, and buybacks. The board raised the quarterly dividend to $0.21 on July 23, 2026. The current test is opening new beds without margin dilution or leverage creep. | Medium-high |
| Financial trend | FY2025 net operating revenue was $5.935 billion, up 10.5%, and net income attributable to Encompass Health was $566.2 million. Q1 2026 revenue rose 9.0% to $1.587 billion and continuing-operations diluted EPS rose 19.6% to $1.77. | High |
| Valuation | At $111.07, EHC screens near 19.05x trailing EPS of about $5.98, 1.82x trailing sales, 4.38x book value near $25.37, 23.73x trailing free cash flow per share near $4.68, and a 0.76% dividend yield. | High |
| Technical trend | Price is above the 50-day moving average near $105.88 and the 200-day moving average near $107.10, just below the 20-day average near $111.39, and still well below the 52-week high near $128. | Medium |
| Risk level | Main risks include Medicare IRF payment rules, labor and therapist staffing costs, occupancy and same-store discharge trends, construction and CON delays, competition, leverage near 2.0x, and policy or compliance shocks. | Medium-high |
| AI confidence | Descriptive confidence is high because company releases and third-party market data agree on key financials. Return confidence is lower because reimbursement and labor assumptions can reset estimates quickly. | High data confidence |
| Investment certainty | EHC has clear business quality and growth visibility, but investment certainty depends on sustained discharges, controlled wage inflation, successful bed expansion, and a valuation that still leaves room if Medicare economics tighten. | Medium |
EHC AI stock forecast
The EHC AI stock forecast is scenario-based because inpatient rehab earnings depend on discharges, net revenue per discharge, labor costs, Medicare rates, de novo openings, occupancy, and valuation multiples. Using the $111.07 price reference, trailing EPS of about $5.98, and an audited three-year model with growth and PE assumptions of 12%/22x, 8%/18x, and 2%/13x, the mechanical outcomes are about $185 in a bullish case, $136 in a base case, and $83 in a bearish case before dividends. The sell-side consensus is Strong Buy with a $140.50 average target, which sits inside the base-case range.
$170 to $190 before dividends
More likely if same-store discharges stay positive, new hospitals ramp on plan, net revenue per discharge keeps rising, labor costs stay controlled, Q2 2026 earnings on August 5, 2026 land near the high end of guidance, and investors pay a low-20s earnings multiple.
$125 to $145 before dividends
More likely if revenue grows near high single digits, adjusted EPS compounds near the company guidance band of about $5.89 to $6.11 for 2026, leverage stays near 2.0x, and the market keeps a high-teens earnings multiple.
$75 to $90 before dividends
More likely if Medicare payment pressure, wage inflation, weaker discharges, delayed de novos, higher interest costs, or compliance issues cut growth and compress the multiple toward the low teens.
EHC AI technical analysis
EHC AI technical analysis is constructive but neutral in the short term as of the August 3, 2026 data cutoff. The July 31, 2026 close was $111.07. Third-party snapshots place the 50-day moving average near $105.88, the 200-day moving average near $107.10, and the 20-day moving average near $111.39, with a 52-week range of about $92.77 to $127.99, RSI near 54, a MACD slightly below zero, and average volume near 0.85 to 0.95 million shares.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $111.07 | July 31, 2026 closing price from market data cross-checks. |
| Immediate support | $104.8 to $108.8 | This major zone combines trend lines and the 50-day and 200-day moving averages, which sit near $105.88 and $107.10. |
| Deeper support | $97.9 to $100 | A secondary support shelf formed by multi-time-frame trend lines below the main zone. |
| Near resistance | $111.4 to $113.4 | This band includes the 20-day moving average near $111.39 and recent daily supply after the July rebound. |
| Upper resistance | $115.9 to $116.3, then the 52-week high area near $128 | The first band is daily trend-line resistance; the 52-week high near $127.99 is a recovery reference, not a forecast. |
| Moving averages | 20-day near $111.39, 50-day near $105.88, 200-day near $107.10 | Price is above the 50-day and 200-day averages and just below the 20-day average, a consolidating rather than extended setup. |
| Momentum | RSI near 54, MACD near -0.24, one-month gain near 4.3% | Momentum is neutral after the July recovery, with price in the middle of its 52-week band. |
| Volume | Average volume near 0.85 to 0.95 million shares | Volume confirmation matters around the August 5, 2026 earnings report, guidance updates, Medicare payment news, and larger buyback prints. |
| Volatility | ATR near 2.8% of price, with Q2 2026 earnings as the next catalyst | Rehab operators can gap on reimbursement language, labor shortages, discharge trends, and capacity timing. |
| Invalidation | Close below $105, then below $98 | A sustained break under $105 would pierce the 50-day average and the main support zone. A break below $98 would challenge the next support shelf near $97.9 to $100. |
EHC AI trading strategy
The EHC AI trading strategy below is a rules-based research framework, not personal advice. It connects chart levels with discharges, net revenue per discharge, labor costs, Medicare reimbursement, de novo openings, free cash flow, leverage, guidance, and the August 5, 2026 Q2 earnings report.
Watch for EHC to hold the $104.8 to $108.8 support zone and advance through $111.4 to $113.4 and then $115.9 to $116.3 with improving volume, stable or raised guidance, and no negative update on Medicare rates or labor inflation.
A failed advance followed by a close below $105 should reduce trend confidence, especially if same-store discharge growth turns negative or wage pressure rises.
If EHC pulls back toward the 50-day average near $105.9 or the 200-day average near $107.1 without a permanent earnings reset, compare the lower price with 2026 adjusted EPS guidance, free cash flow, leverage, discharge trends, and peer action in other post-acute and hospital operators.
Do not treat every pullback as automatically attractive if Medicare payment assumptions worsen, occupancy slips, or de novo ramps miss plans.
Track discharges, same-store discharge growth, net patient revenue per discharge, Adjusted EBITDA margin, adjusted free cash flow, bed additions, hospital openings, leverage ratio, buybacks, the raised $0.21 quarterly dividend, and IRF payment-rule updates.
Position sizing should reflect that EHC can look reasonably valued before a reimbursement or labor reset becomes visible in reported EPS, and that Q2 2026 results on August 5, 2026 can reprice the stock quickly.
Investment research summary
Patients and payers fund Encompass Health because complex post-acute rehab often requires intensive therapy, specialized staffing, and hospital-level medical oversight after stroke, injury, or major illness. The business converts that clinical need into net operating revenue through discharges and net revenue per discharge across a national IRF network.
The moat is strongest in scale across 174 hospitals in 39 states and Puerto Rico, clinical protocols, joint-venture hospital relationships, certificate-of-need positioning, brand recognition in inpatient rehab, and operating know-how. The moat can narrow if hospitals build competing rehab units, if therapists become scarce, or if Medicare reduces payment rates.
The thesis fails if Medicare IRF economics worsen, labor inflation outruns pricing, same-store discharges stall, new hospitals open late or underutilize beds, leverage rises as free cash flow weakens, or compliance and quality issues damage referral relationships.
Mark Tarr has emphasized capacity growth, clinical quality, free cash flow reinvestment, dividends, and share repurchases. In Q1 2026 the company opened a 49-bed hospital in Irmo, South Carolina, added 44 beds to existing facilities, and guided for eight hospital openings with 389 beds plus about 175 bed additions for full-year 2026. The board raised the quarterly dividend to $0.21 on July 23, 2026.
Inpatient rehabilitation demand benefits from aging demographics, stroke and neurological incidence, joint replacement recovery needs, and the clinical preference for intensive rehab over lower-acuity settings when medically appropriate. The offset is that Medicare and commercial payers continuously pressure rates and utilization rules.
At $111.07, EHC already prices a durable growth story at about 19x trailing earnings and roughly 1.8x sales. Margin of safety improves if free cash flow funds bed growth, the higher dividend, and buybacks while leverage stays near 2.0x and the stock does not require low-20s multiple expansion to work.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| Current price reference | $111.07 close on July 31, 2026 | Encompass Health market data cross-check | August 3, 2026 |
| Market capitalization | $11.02 billion, verified against 99.2 million shares | Financial rigor market-cap check plus market data | August 3, 2026 |
| FY2025 net operating revenue | $5.935 billion, up 10.5% | Encompass Health Q4 2025 results | August 3, 2026 |
| FY2025 net income attributable to Encompass Health | $566.2 million | Encompass Health Q4 2025 results | August 3, 2026 |
| FY2025 Adjusted EBITDA and adjusted EPS | $1.2679 billion Adjusted EBITDA and $5.45 adjusted EPS | Encompass Health Q4 2025 supplemental information | August 3, 2026 |
| Q1 2026 revenue and continuing-operations diluted EPS | $1.587 billion revenue and $1.77 diluted EPS | Encompass Health Q1 2026 results | August 3, 2026 |
| Q1 2026 operating metrics | 67,763 discharges, 1.6% same-store discharge growth, $22,633 net patient revenue per discharge | Encompass Health Q1 2026 results | August 3, 2026 |
| Cash and total debt | $110.5 million cash and about $2.574 billion total debt at March 31, 2026 | Encompass Health Q1 2026 balance sheet | August 3, 2026 |
| 2026 company guidance midpoint band | Revenue $6.375 to $6.470 billion, Adjusted EBITDA $1.350 to $1.380 billion, adjusted EPS $5.89 to $6.11 | Encompass Health Q1 2026 guidance update | August 3, 2026 |
| Dividend | Quarterly dividend raised to $0.21 per share, declared July 23, 2026, with an ex-dividend date of October 1, 2026 | Encompass Health dividend press release and market data | August 3, 2026 |
| Analyst consensus | Strong Buy from 13 analysts with a $140.50 average price target | StockAnalysis analyst summary | August 3, 2026 |
| Valuation snapshot | 19.05x PE, 1.82x sales, 4.38x book, 23.73x FCF, 0.76% dividend yield | Audited valuation math on verified price and fundamentals | August 3, 2026 |
| Technical snapshot | 50-day MA near $105.88, 200-day MA near $107.10, 52-week range $92.77 to $127.99 | ChartMill and market range cross-checks | August 3, 2026 |
This EHC AI stock analysis is an informational research tool only. It is not investment advice, a rating, a recommendation, or a promise of future returns. Forecast ranges are scenarios based on available data as of August 3, 2026 and can be wrong if earnings, Medicare reimbursement, labor costs, discharges, capacity plans, debt markets, or market sentiment change. Q2 2026 results were scheduled for August 5, 2026, after this data cutoff.
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