Encompass Health Corporation, formerly Healthsouth, owns and operates inpatient rehabilitation hospitals in the United States. The company provides specialized rehabilitative treatment on an inpatient and outpatient basis. The company was founded in 1983 and is based in Birmingham, Alabama.
EHC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Encompass Health Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Encompass Health Corp ranked in the 21th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. As for the metrics that stood out in our discounted cash flow analysis of Encompass Health Corp, consider:
The company's balance sheet shows it gets 69% of its capital from equity, and 31% of its capital from debt. Its equity weight surpasses that of only 20.97% of free cash flow generating stocks in the Healthcare sector.
The company's compound free cash flow growth rate over the past 5.51 years comes in at -0.02%; that's greater than only 22.05% of US stocks we're applying DCF forecasting to.
Encompass Health Corp's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 10.74% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Healthcare that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as EHC, try MTD, BSX, HZNP, IDXX, and ILMN.
Encompass Health Corp. (NYSE: EHC) and UnityPoint Health – Trinity today announced they are moving forward with plans to build a 40-bed inpatient rehabilitation hospital on UnityPoint Health – Trinity's Moline campus in Moline, Illinois. A certificate of need for the project was approved by the Illinois Health Facilities and Services Review Board in June. The new hospital will be called The Quad Cities Rehabilitation Institute and will be constructed at the intersection of 52nd Avenue and 7th Street. The new hospital is expected to begin serving patients in mid–2022.
Encompass Health Corp. (NYSE: EHC) today announced it will report results for its fourth quarter ended Dec. 31, 2020, after the market closes on Jan. 26, 2021. The Company will host an investor conference call at 9 a.m. ET on Jan. 27, 2021, to discuss its results.