The beat-and-raise quarter with accelerating revenue growth, margin expansion, and strong cash flow supports a bullish thesis. Watch for continued same-store discharge trends and de novo hospital openings as catalysts. The raised guidance midpoint implies ~7% revenue growth and ~7% adjusted EBITDA growth for the remainder of 2026.
Price Chart
Executive Summary
Encompass Health reported Q1 2026 results with net operating revenue of $1.5866B (+9.0% YoY) and GAAP diluted EPS from continuing operations of $1.77 (+19.6% YoY), beating consensus estimates of $1.51 EPS and $1.57B revenue. The company raised its full-year 2026 guidance for revenue, Adjusted EBITDA, and adjusted EPS, signaling continued operational momentum and capacity expansion.
Key Financial Metrics
Key Facts
- Q1 2026 net operating revenue $1.5866B, up 9.0% YoY from $1.4554B
- GAAP diluted EPS from continuing operations $1.77, up 19.6% YoY from $1.48
- Adjusted EPS $1.60, up 16.8% YoY from $1.37
- Adjusted EBITDA $348.8M, up 11.2% YoY from $313.6M
- Full-year 2026 guidance raised: revenue to $6.375B-$6.470B (from $6.365B-$6.465B), Adjusted EBITDA to $1.350B-$1.380B (from $1.340B-$1.380B), adjusted EPS to $5.89-$6.11 (from $5.81-$6.10)
- Total discharges up 4.3% YoY to 67,763; same-store discharge growth 1.6%
- Net patient revenue per discharge $22,633, up 3.7% YoY
- Repurchased 707,965 shares for $71.6M in Q1; $261M remaining under buyback authorization
- Net leverage 1.9x; amended credit agreement extended to March 2031
- Opened 49-bed hospital in Irmo, SC; added 44 beds to existing hospitals
Financial Impact
Revenue beat consensus by ~$16.6M (1.06%); EPS beat consensus by $0.26 (17.2%)
Risk Factors
- Same-store discharge growth decelerated to 1.6% from 4.4% in Q1 2025, signaling potential market saturation or competitive pressure
- Adjusted free cash flow declined 12.9% YoY to $193.8M due to higher working capital and maintenance capex
- Medicaid supplemental payments contributed $15.3M to other revenue, including $4.9M from prior periods — not fully recurring
- Provider tax expenses increased $9.7M YoY, pressuring margins
- RCD and TEAM regulatory programs introduce reimbursement uncertainty for Medicare patients
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0000785161-26-000128 |
| Document: ehcq12026earningsslides_.htm | 0000785161-26-000128 |
| Document: ehc-20260430.htm | 0000785161-26-000128 |
| Document: 0000785161-26-000128-index-headers.html | 0000785161-26-000128 |
| Document: 0000785161-26-000128-index.html | 0000785161-26-000128 |
| Document: 0000785161-26-000128.txt | 0000785161-26-000128 |
| 8-K Data (Synthetic) | 0000785161-26-000128 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 1, 2026 4w ago | Insider Cluster | $122.05 $121.49 | ▼ −0.46% | ▼ −0.78% | $119.78 (−1.86%) |
Aug 11, 2026 7w ago | Insider Cluster | $125.35 $121.37 | ▲ +3.17% | ▲ +2.11% | $119.78 (+4.44%) |
Aug 5, 2026 8w ago | Press Release | $124.82 $122.59 | ▼ −1.79% | ▼ −2.39% | $119.78 (−4.04%) |
Jul 9, 2026 12w ago | Press Release | $110.16 $125.23 | ▲ +13.68% | ▲ +11.25% | $119.78 (+8.73%) |
Jun 1, 2026 17w ago | 8-K | $101.19 $101.39 | ▲ +0.19% | ▲ +2.01% | $119.78 (+18.37%) |
May 15, 2026 19w ago | 8-K | $106.54 $99.36 | ▼ −6.74% | ▼ −8.86% | $119.78 (+12.42%) |
Apr 30, 2026 22w ago | 8-K | $107.38 $102.19 | ▼ −4.83% | ▼ −10.10% | $119.78 (+11.54%) |
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