Encompass Health Corp (EHC) fair value: what the stock is really worth
As of Nov 5, 2026: fair value (intrinsic value) of Encompass Health Corp stock $94.81, price $141, that is 32.9% below the price, quality 63 out of 100. Rating: overvalued. Calculated from audited financials with 26 valuation models and 37 quality factors, updated daily.
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Price vs Fair Value
White line = price, green steps = our fair value per fiscal year. As of Nov 4, 2026.
How to read this chart
60‑month range $41.32 – $141.27 · fair‑value band $49.60 – $138.21 · the $141.27 price screens above the $94.81 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). As of Nov 4, 2026.
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Encompass Health Corporation operates inpatient rehabilitation hospitals in the United States and Puerto Rico.
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The company offers specialized rehabilitative treatment, using technology and therapy, on an inpatient basis for patients recovering from a major injury or illness and seeking to regain functional ability, independence, and quality of life; medical, nursing, therapy, and ancillary services; and rehabilitative care to patients who are recovering from conditions, such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations.
It offers services through the Medicare program to the federal government, managed care plans and private insurers, state governments, and other patients. The company was formerly known as HealthSouth Corporation and changed its name to Encompass Health Corporation in January 2018.
Encompass Health Corporation was incorporated in 1984 and is based in Birmingham, Alabama.
Stock analysis
Encompass Health Corp (EHC) currently trades at $141.27, while our model-based Fair Value estimate is $94.81, 33% below the price, so the stock looks overvalued today.
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Valuation
Bull case: the Multiples group reads highest at a median of $97.92 per share, and 1 of the 26 models we run sit above the $141.27 price.
Bear case: the Dividend Discount group reads lowest at $9.54, and 25 of the 26 models stay below the price. Data coverage for this calculation is high.
Scenario range: $49.60 (bear) to $138.21 (bull), the price of $141.27 sits above it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 63/100 (solid quality), in the Healthcare sector.
Healthy Growth: Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Encompass Health Corp reported revenue of $5.9B in FY2025 versus $4.0B in FY2021, a compound +10.3%/yr. Reported net income was $566M in FY2025, compounding +8.3%/yr from FY2021.
Key figures
Market cap $14.1B Large · P/E ratio 22.6 · P/S ratio 2.99 · EPS (TTM) $6.25 · Dividend yield 0.6% · Net margin 10.2% · Return on equity 25.1% · Return on assets (EBIT) 15.4%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 64 out of 100 (low confidence).
What moves the price
The share trades at its 52-week high and 51% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Healthcare peers we cover trades at −3% fair-value upside, at −33%, EHC screens richer than that median.
Fair Value models
Bear$49.60Fair Value $94.81Bull$138.21
Price $141.27 · Downside -32.9%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2025 figures (about 10 months old). Earnings retained since then ($4.65 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
In the last 6 months, 5 officers or directors sold shares worth $29.5M and none bought.
SaleJohn Patrick DarbyEVP, Gen Counsel & Secretary2× since Aug 10, 2026: 13,764 shares, avg. $124.23$1.7MAug 31, 2026
SaleAndrew L PriceChief Accounting Officer5,211 shares at $120.93$630,166Aug 31, 2026
SaleMark J TarrPresident & CEO, Director2× since Feb 11, 2026: 323,148 shares, avg. $119.05$38.5MAug 10, 2026
SaleDouglas E ColtharpEVP & Chief Financial Officer2× since May 15, 2026: 46,563 shares, avg. $114.35$5.3MAug 10, 2026
SalePatrick William TuerEVP, Chief Operating Officer2× since Feb 10, 2026: 3,486 shares, avg. $107.02$373,076May 11, 2026
SaleEdmund FaySr. Vice Pres. and Treasurer11,937 shares at $107.00$1.3MMar 9, 2026
Plus 20 other filings such as grants, option exercises or tax withholding. They are not market purchases or sales.
Sales are often planned (taxes, diversification, 10b5-1 plans). Purchases with their own money are seen as the stronger sign. For information only: not part of the quality score or Fair Value.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.88/100
Revenue growth appears healthy and is supported by profitability and cash-flow quality.
Revenue growth 1 year
+10.5%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+10.9%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate. Basis: adjusted.
+16.4%
Earnings growth per share plus dividend.
Earnings per share, growth per year+15.8%
Dividend (yield on the price)0.6%
Per share before 2022divided by the spin-off factor 1.257
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.14.1% vs 12.2%, steady
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.19% → 18%
Pace: the 5-year rate starts in 2020 (pandemic)
Growth Forecast
A lot of optimism in the price
The price assumes more growth than the company has delivered so far and more than analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+17.0%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+7.5%
Yearly sales growth analysts expect, extended to five years.
After inflation (USA: IMF forecast 2.4% a year to 2030, 3.1% from 2016 to 2025) that is about +14.3% a year for the price and +5.0% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (100 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Hype
Recent news coverage is unusually upbeat, far more positive than stocks are typically covered.
AI conclusion: Moderate moat from ongoing de novo hospital expansions and discharge growth contrasts with heavy reimbursement dependence that limits durability.
Main risk: Patients could increasingly choose lower-cost skilled nursing facilities, home health agencies or outpatient clinics instead of Encompass Health's inpatient rehabilitation hospitals, reducing admissions and pressuring margins.
Bull case: Encompass Health could integrate telehealth and data tools to support seamless transitions into its inpatient facilities and capture more complex cases that alternative settings cannot handle.
Bear case: Widespread adoption of home-based and outpatient models combined with stricter Medicare reviews could shrink the addressable inpatient volume and sustain margin pressure from lower utilization and higher compliance costs.
Encompass Health has just opened its first wholly owned hospital in Maine as part of ongoing de novo builds and bed additions. Discharge growth has come from both new capacity and same-store gains while new sites incur ramp-up costs. Will the expansion pace ultimately lift margins through greater scale or keep near-term results under pressure until utilization catches up?
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Medical Care Facilities · 235 stocks
Beats the industry median on 7/15 measures
A mixed picture versus its industry peers.
Valuation
Quality Score63 · Above median
Fair Value upside−32.9% · Below median
Profitability
Return on equity (12 months)25.1% · Top 25%
Return on assets10.7% · Top 25%
Net margin (12 months)13.6% · Top 25%
Operating margin (12 months)17.9% · Top 25%
Growth and dividend
Revenue growth (quarter YoY)8.9% · Above median
Dividend yield (12 months)0.6% · Bottom 25%
Balance sheet
Debt / equity1.00× · Highest 25%
Valuation Multiplesvs Medical Care Facilities median · lower = cheaper
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Encompass Health Corp Fair Value". https://www.fairvalue-calculator.com/stock/EHC
Frequently asked questions
Is Encompass Health Corp (EHC) overvalued or undervalued?
As of Nov 4, 2026, our model estimates a fair value of $94.81 versus a price of $141.27, about 33% lower (overvalued).
What is the fair value of EHC?
Our model-based fair value for Encompass Health Corp is $94.81 (as of Nov 4, 2026), built from audited fundamentals. The current price: $141.27.
What is the quality score of EHC?
Encompass Health Corp has a Quality Score of 63/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Encompass Health Corp (EHC)?
Our model-based price target is the fair value of $94.81 (as of Nov 4, 2026) from 26 valuation models. Cautious scenario $49.60, optimistic scenario $138.21. It is a calculation from audited fundamentals, not an analyst target.
What is the Encompass Health Corp stock forecast for 2026?
Our models put fair value at $94.81, about 33% lower versus a price of $141.27 (overvalued). Cautious scenario $49.60, optimistic scenario $138.21. The calculation is refreshed regularly with new filings.
What is the revenue of Encompass Health Corp (EHC)?
Encompass Health Corp reported trailing-twelve-month revenue of about $6.3B (latest available figure, as of Nov 4, 2026).
Does Encompass Health Corp pay a dividend?
Encompass Health Corp currently shows a dividend yield of 0.55% relative to its recent price (as of Nov 4, 2026).
What growth is priced into Encompass Health Corp (EHC)?
For today's price to be fair in a discounted-cash-flow model, Encompass Health Corp would have to grow free cash flow by +17.0 % per year for five years (discount rate 8.3 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +10.7 % per year. As of Nov 4, 2026.
What discount rate (WACC) does the fair value of EHC use?
Our models discount Encompass Health Corp at 8.3 %: a base by market capitalisation (large), damped by beta 0.60, country premium for USA. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Encompass Health Corp that is +17.0 % per year a year over ten years, using the same discount rate (8.3 %) and the same formula as our fair value.
How much growth has Encompass Health Corp (EHC) delivered so far?
Over the past 5 years revenue at Encompass Health Corp grew +10.7 % a year. The price currently implies +17.0 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Encompass Health Corp (EHC) growing?
The median revenue growth in the sector is +6.2 % a year. That is the yardstick for the growth priced into Encompass Health Corp (+17.0 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Encompass Health Corp (EHC)?
The free-cash-flow yield on the price is 3.11 %: that much free cash flow Encompass Health Corp produces per unit of market value. When it exceeds the discount rate of our models (8.3 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Encompass Health Corp (EHC)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Encompass Health Corp it is $94.81 per share (as of Nov 4, 2026), against a price of $141.27. It is the blended result of 26 valuation models (cash flow, earnings, asset, dividend).
Is Encompass Health Corp stock overvalued or undervalued in 2026?
As of Nov 4, 2026, EHC trades above its calculated fair value: price $141.27, fair value $94.81, a gap of about −33% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of EHC?
No. The price is what the market pays today ($141.27); the fair value is what the company's own numbers justify ($94.81). For Encompass Health Corp the two are $46.46 per share apart. That gap is exactly why we show both numbers side by side.
How much is Encompass Health Corp worth?
The market values Encompass Health Corp at about $14.1B (market capitalisation, as of Nov 4, 2026). Per share that is $141.27; our models calculate a fair value of $94.81 per share.
What do the bullish and bearish scenarios say about EHC?
Our models span a range for Encompass Health Corp: cautious scenario $49.60, base $94.81, optimistic $138.21 per share (as of Nov 4, 2026, price $141.27). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of EHC?
Encompass Health Corp trades at a price-to-earnings ratio of 22.6 (as of Nov 4, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of $94.81 is built from several models across several years. Other multiples: PEG 0.4, P/B 5.8, P/S 3.0, EV/EBITDA 14.5.
What is the PEG ratio of EHC?
The PEG ratio of Encompass Health Corp is 0.41 (P/E divided by earnings growth, as of Nov 4, 2026). That is below 1, so growth is priced more cheaply than the earnings multiple alone suggests.
How solid is the balance sheet of Encompass Health Corp (EHC)?
Balance-sheet figures for Encompass Health Corp (as of Nov 4, 2026): return on equity 25.1%, debt of 1.00 per unit of equity. They feed the Quality Score of 63/100, which measures business quality independently of the share price.
How far is EHC from its 52-week high?
Encompass Health Corp trades at $141.27, at its 52-week high of $141.27 and 51% above the low of $93.47 (as of Nov 5, 2026). Distance from the high says nothing about value: that is what the fair value of $94.81 is for.
Which stocks are comparable to Encompass Health Corp?
From the same area (Healthcare) we also value HCA Healthcare, Inc, Fresenius SE, Tenet Healthcare Corporation, Dr. Sulaiman Al Habib Medical Services Group, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Encompass Health Corp stock attractive at the current price?
The data as of Nov 4, 2026: price $141.27, calculated fair value $94.81 (−33%), Quality Score 63/100, from 26 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of EHC calculated?
We run Encompass Health Corp through 26 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of $94.81, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 15.5% above its aggregate fair value. Encompass Health Corp itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Encompass Health Corp (EHC)?
The closing price on Nov 5, 2026 was $141.27. Our model-based fair value is $94.81, about 33% lower (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Encompass Health Corp right now?
The price sits above even our optimistic bull case ($138.21). The favourable scenario is already priced in. The model range is unusually wide ($49.60 to $138.21). The outcome hinges heavily on assumptions, so read the point estimate with caution. Solid but not exceptional quality (63/100) and above fair value, neither a clear bargain nor a standout compounder.
Where does the earnings growth of Encompass Health Corp (EHC) come from?
Earnings per share at Encompass Health Corp grew +8.4 % a year from 2014 to 2025. Broken into its drivers: revenue per share +6.3 %, EBIT margin +2.4 %, tax rate +2.2 %, residual (interest, one-offs) −2.6 %. The four rates multiply to the earnings growth rate, they do not add up. Start and end are three-year averages so a single exceptional year does not distort the result.
Key figures of Encompass Health Corp
How large is the market capitalisation of Encompass Health Corp (EHC)?
The market capitalisation of Encompass Health Corp is $14.1B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Encompass Health Corp (EHC)?
The price-to-sales ratio of Encompass Health Corp is 2.99 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Encompass Health Corp (EHC)?
Earnings per share at Encompass Health Corp are $6.25 (price ÷ EPS = P/E 22.6). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Encompass Health Corp (EHC)?
The dividend yield of Encompass Health Corp is 0.6% (payout 12.5%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Encompass Health Corp (EHC)?
The net margin of Encompass Health Corp is 10.2% (last twelve months). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Encompass Health Corp (EHC)?
The return on equity (ROE) of Encompass Health Corp is 25.1% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Encompass Health Corp (EHC)?
On an EBIT basis the return on assets of Encompass Health Corp is 15.4% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Encompass Health Corp (EHC)?
The operating margin of Encompass Health Corp is 17.9% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Encompass Health Corp (EHC)?
Revenue at Encompass Health Corp is growing +8.9% versus a year earlier (3y avg +10.9%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Encompass Health Corp (EHC)?
Earnings per share at Encompass Health Corp are growing +21.5% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Encompass Health Corp (EHC) carry?
The net debt of Encompass Health Corp is $2.6B (fiscal year 2025, ≈ 5.9 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Nov 4, 2026