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Why Is Ensign Group (ENSG) Up 1.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Ensign Group (ENSG - Free Report) . Shares have added about 1.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ensign Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Ensign Group's Q1 Earnings Beat on Higher Occupancies
Ensign Group reported a first-quarter 2024 adjusted earnings per share (EPS) of $1.30, which beat the Zacks Consensus Estimate of $1.29. The bottom line advanced 15% year over year.
Operating revenues of $1 billion improved 13.9% year over year in the quarter under review. The top line outpaced the consensus mark by 0.5%.
The quarterly results gained from higher skilled service revenues, an increase in skilled mix and improved occupancies. Declining cash flow from operations and a significant rise in overall expenses may have impacted the performance.
Q1 Update
Ensign Group’s adjusted net income grew 16.6% year over year to $75.4 million in the first quarter and beat of our estimate of $74.2 million.
Same-store occupancy improved 210 basis points (bps) year over year while transitioning occupancy expanded 220 bps year over year.
Total expenses of $928 million escalated 14.3 % year over year in the quarter under review and came higher than our estimate of $921.4 million. The year-over-year increase was due to higher cost of services, general and administrative expenses and rent.
Segmental Update
Skilled Services: The segment’s revenues rose 13.9% year over year to $969.6 million in the first quarter. The metric missed our estimate by a whisker. The metric was supported by improved occupancy and improved patient days. Segment income of $126.8 million improved 11.9% year over year.
Skilled nursing and campus operations of the segment totaled 264 and 27, respectively, at the first-quarter end.
Standard Bearer: Rental revenues amounted to $22.2 million, which grew 12.6% year over year and outpaced our estimate of $21.7 million. The metric was supported by rising acquisitions. Segmental income of $7.3 million advanced 0.5% year over year.
Funds from Operations were $14.1 million in the first quarter, which improved 6.8% year over year.
Financial Update (as of Mar 31, 2024)
Ensign Group exited the first quarter with cash and cash equivalents of $511.8 million, which inched up 0.4% from the 2023-end figure. It had a leftover capacity of $593.7 million under its line of credit at the first-quarter end.
Total assets of $4.3 billion rose 3.1% from the 2023-end level.
Long-term debt-less current maturities were $144.5 million, which declined 0.7% from the figure as of Dec 31, 2023. Current maturities of long-term debt amounted to $4 million.
Total equity of $1.6 billion climbed nearly 5.8% from the figure at 2023 end.
ENSG generated net cash from operations of $35.3 million in the first quarter of 2024, which plunged 27% from the year-ago figure.
Capital-Deployment Update
Ensign Group did not buy back shares in the first quarter. During the quarter, management paid dividends worth $3.4 million.
2024 Outlook Reaffirmed
Revenues are anticipated to lie within $4.13-$4.17 billion, the mid-point of which indicates an improvement of 11.3% from the 2023 figure of $3.73 billion.
Adjusted EPS is forecasted to be between $5.29 and $5.47 for 2024, the midpoint of which suggests 13% growth from the 2023 figure of $4.77.
The weighted average common shares outstanding is estimated to be around 58.5 million and the tax rate is assumed to be 25% for 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Ensign Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Ensign Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Ensign Group (ENSG) Up 1.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Ensign Group (ENSG - Free Report) . Shares have added about 1.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ensign Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Ensign Group's Q1 Earnings Beat on Higher Occupancies
Ensign Group reported a first-quarter 2024 adjusted earnings per share (EPS) of $1.30, which beat the Zacks Consensus Estimate of $1.29. The bottom line advanced 15% year over year.
Operating revenues of $1 billion improved 13.9% year over year in the quarter under review. The top line outpaced the consensus mark by 0.5%.
The quarterly results gained from higher skilled service revenues, an increase in skilled mix and improved occupancies. Declining cash flow from operations and a significant rise in overall expenses may have impacted the performance.
Q1 Update
Ensign Group’s adjusted net income grew 16.6% year over year to $75.4 million in the first quarter and beat of our estimate of $74.2 million.
Same-store occupancy improved 210 basis points (bps) year over year while transitioning occupancy expanded 220 bps year over year.
Total expenses of $928 million escalated 14.3 % year over year in the quarter under review and came higher than our estimate of $921.4 million. The year-over-year increase was due to higher cost of services, general and administrative expenses and rent.
Segmental Update
Skilled Services: The segment’s revenues rose 13.9% year over year to $969.6 million in the first quarter. The metric missed our estimate by a whisker. The metric was supported by improved occupancy and improved patient days. Segment income of $126.8 million improved 11.9% year over year.
Skilled nursing and campus operations of the segment totaled 264 and 27, respectively, at the first-quarter end.
Standard Bearer: Rental revenues amounted to $22.2 million, which grew 12.6% year over year and outpaced our estimate of $21.7 million. The metric was supported by rising acquisitions. Segmental income of $7.3 million advanced 0.5% year over year.
Funds from Operations were $14.1 million in the first quarter, which improved 6.8% year over year.
Financial Update (as of Mar 31, 2024)
Ensign Group exited the first quarter with cash and cash equivalents of $511.8 million, which inched up 0.4% from the 2023-end figure. It had a leftover capacity of $593.7 million under its line of credit at the first-quarter end.
Total assets of $4.3 billion rose 3.1% from the 2023-end level.
Long-term debt-less current maturities were $144.5 million, which declined 0.7% from the figure as of Dec 31, 2023. Current maturities of long-term debt amounted to $4 million.
Total equity of $1.6 billion climbed nearly 5.8% from the figure at 2023 end.
ENSG generated net cash from operations of $35.3 million in the first quarter of 2024, which plunged 27% from the year-ago figure.
Capital-Deployment Update
Ensign Group did not buy back shares in the first quarter. During the quarter, management paid dividends worth $3.4 million.
2024 Outlook Reaffirmed
Revenues are anticipated to lie within $4.13-$4.17 billion, the mid-point of which indicates an improvement of 11.3% from the 2023 figure of $3.73 billion.
Adjusted EPS is forecasted to be between $5.29 and $5.47 for 2024, the midpoint of which suggests 13% growth from the 2023 figure of $4.77.
The weighted average common shares outstanding is estimated to be around 58.5 million and the tax rate is assumed to be 25% for 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
Currently, Ensign Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Ensign Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.