Encompass Health’s third quarter saw revenue and non-GAAP profit meeting or modestly exceeding Wall Street expectations, yet the market responded negatively due to concerns over slowing same-store sales growth and volume headwinds. Management attributed the moderation in same-store discharge growth to tough prior-year comparisons, the timing of new capacity additions, and consolidation of two satellite locations. CEO Mark Tarr highlighted that “quarterly fluctuations in discharge volume growth and the composition of that growth between same and new store is a normal expectation of our business model.” Despite steady overall growth, the company’s explanation of volume softness did not fully allay investor concerns, as evidenced by the market’s reaction.
Health care services provider Encompass Health (NYSE:EHC) met Wall Streets revenue expectations in Q3 CY2025, with sales up 9.3% year on year to $1.48 billion. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $5.93 billion at the midpoint. Its non-GAAP profit of $1.23 per share was 3.3% above analysts’ consensus estimates.
Health care services provider Encompass Health (NYSE:EHC) met Wall Street’s revenue expectations in Q3 CY2025, with sales up 9.4% year on year to $1.48 billion. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $5.93 billion at the midpoint. Its non-GAAP profit of $1.23 per share was 3.2% above analysts’ consensus estimates.
Even if a company is profitable, it doesn’t always mean it’s a great investment.
Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
A powerful surge in AI-related stocks — led by a 9% advance in NVIDIA Corp. (NASDAQ:NVDA) over the past two sessions — propelled the S&P 500 above the 6,900 mark and lifted the Nasdaq 100 to 26,100 points, both breaking new records, as investors brace for the Federal Reserve's
Encompass Health trades at $120.32 per share and has stayed right on track with the overall market, gaining 16.5% over the last six months. At the same time, the S&P 500 has returned 21.1%.
The stocks in this article are all trading near their 52-week highs.
This strength often reflects positive developments such as new product launches, favorable industry trends, or improved financial performance.
Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations.
However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie.
From novel pharmaceuticals to telemedicine, most healthcare companies are on a mission to drive better patient outcomes. But financial performance has lagged recently as players offloaded surplus COVID inventories in 2023 and 2024, a headwind for overall demand.
The result? Over the past six months, the industry’s return was flat while the S&P 500 climbed by 16.4%.
Wall Street has issued downbeat forecasts for the stocks in this article.
These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.
Just because a business is in the green today doesn’t mean it will thrive tomorrow.
Let’s dig into the relative performance of Encompass Health (NYSE:EHC) and its peers as we unravel the now-completed Q2 outpatient & specialty care earnings season.
Health care services provider Encompass Health (NYSE:EHC) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 12% year on year to $1.46 billion. The company’s full-year revenue guidance of $5.93 billion at the midpoint came in 0.7% above analysts’ estimates. Its non-GAAP profit of $1.40 per share was 15.8% above analysts’ consensus estimates.
