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Ensign Group Stock Up 19.2% in Six Months: More Growth Ahead?
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Shares of The Ensign Group, Inc. (ENSG - Free Report) have gained 19.2% in the past six months compared with the industry’s 14.2% growth. The Medical sector and the S&P 500 Composite increased 2.6% and 4.7%, respectively, in the same time frame.
ENSG's 3-Month Price Performance
Image Source: Zacks Investment Research
An extensive healthcare network, acquisitions of healthcare facilities and a notable financial position continue to drive Ensign Group. Ensign Group carries a Zacks Rank #2 (Buy) at present.
Rising Estimates of ENSG
The Zacks Consensus Estimate for Ensign Group’s 2024 earnings is pegged at $5.44 per share, indicating a 14.1% increase from the 2023 reported figure. The consensus mark for revenues is $4.2 billion, implying 13.1% growth from the year-ago figure. It has witnessed upward estimate revisions over the past 30 days. It has an impressive track record of beating estimates in each of the trailing four quarters, the average surprise being 1.40%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings is pegged at $5.99 per share, which implies a 10.1% improvement from the 2024 estimate. The consensus mark for revenues is $4.6 billion, implying a 9.5% rise from the 2024 estimate.
Solid Return on Equity
Ensign Group’s efficiency in utilizing shareholders’ funds can be substantiated by its return on equity of 19% as of June 30, 2024, against the industry’s negative return of 14.6%.
Key Drivers
Ensign Group's revenue growth is being fueled by the robust performance of its Skilled Services segment, which includes skilled nursing, senior living, and rehabilitative care across its network of 315 healthcare facilities in 14 states. Management anticipates 2024 revenues between $4.20 billion and $4.22 billion, representing a 12.9% increase at the midpoint compared to 2023. This growth is supported by the company's ability to attract higher acuity patients, leading to increased skilled mix days, particularly in same-store operations.
The aging U.S. population is expected to sustain the demand for Ensign Group’s senior living services, while the growing need for effective rehabilitation services is likely to boost service revenues.
In its Standard Bearer segment, Ensign Group generates rental income through triple-net lease agreements, under which it leases post-acute care properties to healthcare operators. This arrangement benefits the company as it secures rental income while the tenant covers property-related expenses. Currently, it owns 122 real estate assets and recorded rental revenues of $11.4 million in the first half of 2024, up 12.1% year over year.
Ensign Group boasts a successful track record of acquiring real estate or post-acute care operations, which, in turn, has expanded its reach across several U.S. communities. It recently bought the operations of a nursing facility in Overland Park, KS. The company has also acquired the operations of seven nursing facilities in Colorado. Acquisitions continue to remain a top priority for the management while deploying capital.
Ensign Group sustains its acquisition strategy through a strong financial foundation bolstered by healthy cash reserves and robust cash flow generation. In the first half of 2024, the company reported $112.2 million in operating cash flows. Additionally, Ensign Group remains committed to returning value to shareholders, as demonstrated by 21 consecutive years of dividend growth, reflecting its focus on long-term financial stability and shareholder returns.
Tenet Healthcare’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 58.48%. The consensus estimate for THC’s 2024 earnings and revenues indicates an improvement of 53.6% and 1.4%, respectively, from the 2023 reported figures. The consensus estimate for Tenet Healthcare’s earnings has moved 5.6% north in the past 60 days.
HCA Healthcare’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average surprise being 8.24%. The consensus estimate for HCA’s 2024 earnings and revenues implies an improvement of 18.2% and 8.9% from the respective 2023 figures. The consensus estimate for HCA Healthcare’s 2024 earnings has moved 1.2% north in the past 30 days.
Integer’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.83%. The consensus estimate for ITGR’s 2024 earnings and revenues indicates an improvement of 13.7% and 9.6%, respectively, from the 2023 figures. The consensus estimate for Integer’s 2024 earnings has moved 0.2% north in the past 60 days.
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Ensign Group Stock Up 19.2% in Six Months: More Growth Ahead?
Shares of The Ensign Group, Inc. (ENSG - Free Report) have gained 19.2% in the past six months compared with the industry’s 14.2% growth. The Medical sector and the S&P 500 Composite increased 2.6% and 4.7%, respectively, in the same time frame.
ENSG's 3-Month Price Performance
Image Source: Zacks Investment Research
An extensive healthcare network, acquisitions of healthcare facilities and a notable financial position continue to drive Ensign Group. Ensign Group carries a Zacks Rank #2 (Buy) at present.
Rising Estimates of ENSG
The Zacks Consensus Estimate for Ensign Group’s 2024 earnings is pegged at $5.44 per share, indicating a 14.1% increase from the 2023 reported figure. The consensus mark for revenues is $4.2 billion, implying 13.1% growth from the year-ago figure. It has witnessed upward estimate revisions over the past 30 days. It has an impressive track record of beating estimates in each of the trailing four quarters, the average surprise being 1.40%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings is pegged at $5.99 per share, which implies a 10.1% improvement from the 2024 estimate. The consensus mark for revenues is $4.6 billion, implying a 9.5% rise from the 2024 estimate.
Solid Return on Equity
Ensign Group’s efficiency in utilizing shareholders’ funds can be substantiated by its return on equity of 19% as of June 30, 2024, against the industry’s negative return of 14.6%.
Key Drivers
Ensign Group's revenue growth is being fueled by the robust performance of its Skilled Services segment, which includes skilled nursing, senior living, and rehabilitative care across its network of 315 healthcare facilities in 14 states. Management anticipates 2024 revenues between $4.20 billion and $4.22 billion, representing a 12.9% increase at the midpoint compared to 2023. This growth is supported by the company's ability to attract higher acuity patients, leading to increased skilled mix days, particularly in same-store operations.
The aging U.S. population is expected to sustain the demand for Ensign Group’s senior living services, while the growing need for effective rehabilitation services is likely to boost service revenues.
In its Standard Bearer segment, Ensign Group generates rental income through triple-net lease agreements, under which it leases post-acute care properties to healthcare operators. This arrangement benefits the company as it secures rental income while the tenant covers property-related expenses. Currently, it owns 122 real estate assets and recorded rental revenues of $11.4 million in the first half of 2024, up 12.1% year over year.
Ensign Group boasts a successful track record of acquiring real estate or post-acute care operations, which, in turn, has expanded its reach across several U.S. communities. It recently bought the operations of a nursing facility in Overland Park, KS. The company has also acquired the operations of seven nursing facilities in Colorado. Acquisitions continue to remain a top priority for the management while deploying capital.
Ensign Group sustains its acquisition strategy through a strong financial foundation bolstered by healthy cash reserves and robust cash flow generation. In the first half of 2024, the company reported $112.2 million in operating cash flows. Additionally, Ensign Group remains committed to returning value to shareholders, as demonstrated by 21 consecutive years of dividend growth, reflecting its focus on long-term financial stability and shareholder returns.
Other Stocks to Consider
Some other top-ranked stocks from the Medical space are Tenet Healthcare Corporation (THC - Free Report) , HCA Healthcare, Inc. (HCA - Free Report) and Integer Holdings Corporation (ITGR - Free Report) . While Tenet Healthcare sports a Zacks Rank #1 (Strong Buy) at present, HCA Healthcare and Integer carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tenet Healthcare’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 58.48%. The consensus estimate for THC’s 2024 earnings and revenues indicates an improvement of 53.6% and 1.4%, respectively, from the 2023 reported figures. The consensus estimate for Tenet Healthcare’s earnings has moved 5.6% north in the past 60 days.
HCA Healthcare’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average surprise being 8.24%. The consensus estimate for HCA’s 2024 earnings and revenues implies an improvement of 18.2% and 8.9% from the respective 2023 figures. The consensus estimate for HCA Healthcare’s 2024 earnings has moved 1.2% north in the past 30 days.
Integer’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.83%. The consensus estimate for ITGR’s 2024 earnings and revenues indicates an improvement of 13.7% and 9.6%, respectively, from the 2023 figures. The consensus estimate for Integer’s 2024 earnings has moved 0.2% north in the past 60 days.