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EHC Gains on Sustained Revenue Growth, Expansion Plans
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Encompass Health Corporation (EHC - Free Report) remains well-poised for growth on the back of solid top-line growth, continuous addition of facilities to its existing network and robust cash reserves. A strong 2025 outlook reinforces the growth prospects of the stock.
Let’s delve deeper and analyze the factors aiding Encompass Health.
EHC’s Impressive Earnings Surprise History
Encompass Health boasts a robust earnings surprise record. It has outpaced estimates in each of the trailing four quarters, the average surprise being 13.65%.
Encompass Health’s Solid 2025 Outlook
Revenues are anticipated to be in the band of $5.8-$5.9 billion for 2025, the mid-point of which indicates an improvement of 8.9% from the 2024 figure.
Adjusted EBITDA is anticipated to be between $1.16 billion and $1.2 billion. The midpoint of the guidance indicates 6.9% growth from the 2024 figure.
Adjusted earnings per share from continuing operations are estimated to be in the $4.67-$4.96 band. The mid-point of the outlook indicates a growth of 8.7% from the 2024 figure.
EHC’s Continued Top-Line Growth
Revenues of Encompass Health have been on the rise since 2010. In 2024, the metric benefited on the back of higher volumes across its Inpatient Rehabilitation unit.
Sustained demand for enhanced rehabilitation care, as patients not only require proper treatment and medication for recovery but also need comprehensive rehabilitation services to return to normal daily activities, is likely to continue driving revenues in the days ahead.
Other healthcare providers offering rehabilitative care throughout the United States include Select Medical Holdings Corporation (SEM - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and Tenet Healthcare Corporation (THC - Free Report) .
Encompass Health’s Notable Expansion Endeavors
The healthcare provider continues to pursue growth initiatives by either inaugurating hospitals or adding beds to its existing facilities, which should contribute to revenue growth in the long term. The year 2024 has been no exception to the abovementioned trend and announcements of more growth-related endeavors are expected to flow in throughout 2025.
Encompass Health opened seven hospitals and made a total addition of 427 beds in 2024. The company expects to open seven de novo hospitals, adding 340 beds, and a 50-bed satellite hospital in 2025. It also expects to add around 100 beds to existing hospitals in 2025. Over the 2023-2027 period, it plans to inaugurate six-ten de novos each year as well as make bed additions in the range of 80-120 each year.
EHC’s Strong Financial Position
Encompass Health boasts a robust financial position. It possessed sufficient cash reserves of $85.4 million and had nearly $944 million available under its $1 billion revolving credit facility as of Dec. 31, 2024.
The company has been generating solid cash flows from operations, which enable it to pursue growth-related efforts and tactical deployment of capital. In 2024, net cash provided by operating activities improved 17.9% from the prior-year comparable period. In 2025, the company anticipates adjusted free cash flow within $590-$690 million.
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EHC Gains on Sustained Revenue Growth, Expansion Plans
Encompass Health Corporation (EHC - Free Report) remains well-poised for growth on the back of solid top-line growth, continuous addition of facilities to its existing network and robust cash reserves. A strong 2025 outlook reinforces the growth prospects of the stock.
Let’s delve deeper and analyze the factors aiding Encompass Health.
EHC’s Impressive Earnings Surprise History
Encompass Health boasts a robust earnings surprise record. It has outpaced estimates in each of the trailing four quarters, the average surprise being 13.65%.
Encompass Health’s Solid 2025 Outlook
Revenues are anticipated to be in the band of $5.8-$5.9 billion for 2025, the mid-point of which indicates an improvement of 8.9% from the 2024 figure.
Adjusted EBITDA is anticipated to be between $1.16 billion and $1.2 billion. The midpoint of the guidance indicates 6.9% growth from the 2024 figure.
Adjusted earnings per share from continuing operations are estimated to be in the $4.67-$4.96 band. The mid-point of the outlook indicates a growth of 8.7% from the 2024 figure.
EHC’s Continued Top-Line Growth
Revenues of Encompass Health have been on the rise since 2010. In 2024, the metric benefited on the back of higher volumes across its Inpatient Rehabilitation unit.
Sustained demand for enhanced rehabilitation care, as patients not only require proper treatment and medication for recovery but also need comprehensive rehabilitation services to return to normal daily activities, is likely to continue driving revenues in the days ahead.
Other healthcare providers offering rehabilitative care throughout the United States include Select Medical Holdings Corporation (SEM - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and Tenet Healthcare Corporation (THC - Free Report) .
Encompass Health’s Notable Expansion Endeavors
The healthcare provider continues to pursue growth initiatives by either inaugurating hospitals or adding beds to its existing facilities, which should contribute to revenue growth in the long term. The year 2024 has been no exception to the abovementioned trend and announcements of more growth-related endeavors are expected to flow in throughout 2025.
Encompass Health opened seven hospitals and made a total addition of 427 beds in 2024. The company expects to open seven de novo hospitals, adding 340 beds, and a 50-bed satellite hospital in 2025. It also expects to add around 100 beds to existing hospitals in 2025. Over the 2023-2027 period, it plans to inaugurate six-ten de novos each year as well as make bed additions in the range of 80-120 each year.
EHC’s Strong Financial Position
Encompass Health boasts a robust financial position. It possessed sufficient cash reserves of $85.4 million and had nearly $944 million available under its $1 billion revolving credit facility as of Dec. 31, 2024.
The company has been generating solid cash flows from operations, which enable it to pursue growth-related efforts and tactical deployment of capital. In 2024, net cash provided by operating activities improved 17.9% from the prior-year comparable period. In 2025, the company anticipates adjusted free cash flow within $590-$690 million.