The Ensign Group provides a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, home health and hospice services, urgent care services and other rehabilitative and healthcare services. The company was founded in 1999 and is based in Mission Viejo, California.
ENSG Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Ensign Group Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Ensign Group Inc ranked in the 52th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 32% on a DCF basis. The most interesting components of our discounted cash flow analysis for Ensign Group Inc ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 13.36; that's higher than 75.92% of US stocks in the Healthcare sector that have positive free cash flow.
Ensign Group Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than only 8.8% of tickers in our DCF set.
ENSG's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than only 8.8% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CBPO, HRC, SNY, REGN, and DYNT can be thought of as valuation peers to ENSG, in the sense that they are in the Healthcare sector and have a similar price forecast based on DCF valuation.
Investment Thesis The Ensign Group, Inc. (ENSG) is an active investment alternative in competition with dozens of other medical care and long-term care enterprises. Success from an investment point of view relates more to increased stock price than lives saved or retirement prolonged. That measure here rests importantly on already...
Peter F. Way, CFA on Seeking Alpha | September 17, 2020
Tuesday's IBD 50 Stocks To Watch pick, medical facility leader Ensign Group, is approaching a new buy point. California-based Ensign Group operates over 200 nursing facilities and over 60 assisted living facilities.