Skip to main content
hello world

Paid Post: Content produced by Motley Fool. The Globe and Mail was not involved, and material was not reviewed prior to publication.

Why Encompass Health Stock Was a Winner on Wednesday

Motley Fool - Wed Feb 8, 2023

What happened

Rehabilitation-care specialist Encompass Health(NYSE: EHC) easily surmounted the hump of Hump Day. Following its latest earnings release, published after market hours on Tuesday, the stock traded up by nearly 3% on Wednesday. What helped greatly was the twin beats notched by the company.

So what

For its fourth quarter of 2022, Encompass Health posted just under $1.14 billion in revenue, which was 9% higher on a year-over-year basis. Non-GAAP (adjusted) net income slipped, however, by 9% to nearly $89 million, or $0.88 per share.

Both headline figures beat analyst estimates, albeit not by much. Still, a beat is a beat, and this was sufficiently encouraging for investors. On average, prognosticators following the stock were anticipating revenue of $1.12 billion and adjusted, per-share net income of $0.84.

In the earnings release, Encompass Health chalked up its improvements largely to pure volume. It pointed out that discharges were up by 7% during the quarter.

Now what

This means a full-steam-ahead strategy for Encompass Health. The company quoted its CEO Mark Tarr as saying, "Our value proposition and our operating strategy have been further validated and we remain highly optimistic about the long-term prospects of our business."

Encompass Health proffered guidance for the entirety of 2023. For the year, the company believes it will earn $4.68 billion to $4.76 billion in revenue, with adjusted earnings per share landing at $2.87 to $3.16. Both figures would represent improvements over the 2022 results of $4.35 billion and $2.85, respectively.

10 stocks we like better than Encompass Health
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Encompass Health wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of February 8, 2023

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.