Encompass Health Updates FY25 Revenue Projections to $5.88-$5.98 Billion, Matching Market Consensus

Encompass Health Corp has revised its FY25 revenue forecast to $5.88-$5.98 billion, aligning with market consensus of $5.89 billion. The company specializes in post-acute healthcare services and operates inpatient rehabilitation hospitals across the US. Encompass Health has demonstrated strong financial health with 10.7% revenue growth and 16.76% operating margin. Despite some warning signs, analyst sentiment remains positive with a target price of $131.58 and a recommendation score of 1.5.

Encompass Health Corp (NYSE: EHC) has revised its FY25 revenue forecast to $5.88-$5.98 billion, aligning with market consensus of $5.89 billion. The company specializes in post-acute healthcare services and operates inpatient rehabilitation hospitals across the US. Encompass Health has demonstrated strong financial health with 10.7% revenue growth and 16.76% operating margin. Despite some warning signs, analyst sentiment remains positive with a target price of $131.58 and a recommendation score of 1.5.

In the second quarter of 2025, Encompass Health reported revenues of $1.46 billion, up 10.6% year-over-year, and beat analysts’ revenue expectations by 1.7% [1]. The company’s EPS of $1.40 also exceeded the forecasted $1.21, marking a 15.7% surprise [3]. These strong results were driven by operational efficiencies and strategic growth initiatives, including hospital expansions and AI innovations.

Encompass Health’s full-year guidance for net operating revenue and adjusted EBITDA was raised to $5.88-$5.98 billion and $1.22-$1.25 billion, respectively. The company plans to continue expanding its hospital network and leveraging AI technologies to enhance operational efficiency and patient care.

Analysts have expressed optimism about Encompass Health’s growth prospects, with a majority reconfirming their estimates over the last 30 days. However, investors should be mindful of potential challenges, such as changes in Medicare reimbursement policies, rising healthcare costs, and competitive pressures.

Encompass Health’s stock has delivered a 22.93% return over the past year, with notably low volatility (Beta 0.74). The stock is trading near its 52-week high of $123.13, with analyst price targets ranging from $125 to $145.

References:

[1] https://finance.yahoo.com/news/encompass-health-ehc-reports-q2-030540344.html
[2] https://www.ainvest.com/news/select-medical-reaffirms-5-3b-5-5b-2025-revenue-outlook-inpatient-rehab-growth-2508/
[3] https://www.investing.com/news/transcripts/earnings-call-transcript-encompass-health-q2-2025-beats-expectations-shares-rise-93CH-4171038