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Enhabit, Inc (EHAB)
NYSE:EHAB
US Market

Enhabit, Inc (EHAB) AI Stock Analysis

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EH

Enhabit, Inc

(NYSE:EHAB)

Rating:49Neutral
Price Target:
$10.50
▲(0.67%Upside)
Enhabit, Inc. presents a challenging financial landscape with negative profit margins and declining revenue, which are significant concerns. While there are positive signals from the earnings call in terms of admission and revenue growth alongside cost efficiency improvements, the technical indicators and valuation metrics highlight ongoing struggles. The stock score reflects the need for strategic enhancements and cautious optimism for future performance improvement.
Positive Factors
Financial Performance
EPS of $0.10 came in above consensus.
Growth and Performance
Hospice continued to exceed expectations with significant growth, attributed to increased referrals and improved conversion rates.
Valuation and Investment Potential
The current valuation and expected EBITDA growth trajectory make the stock a compelling investment, with continued execution likely to result in significant stock upside.
Negative Factors
Operational Challenges
EHAB expects to close 5 HHA branches and 2 Hospice branches, which could indicate challenges in those areas.
Performance Challenges
Home Health again fell short compared to forecasts, marking the third consecutive year of declining EBITDA, indicating a challenging rate and mix environment.
Revenue Challenges
Home Health revenues of $200.6m fell short of the estimate by about 7%.

Enhabit, Inc (EHAB) vs. SPDR S&P 500 ETF (SPY)

Enhabit, Inc Business Overview & Revenue Model

Company DescriptionEnhabit, Inc. (EHAB) is a leading provider of home health and hospice care services in the United States. The company operates within the healthcare sector, focusing on delivering personalized care to patients in the comfort of their homes. Enhabit offers a range of services, including skilled nursing, physical therapy, occupational therapy, speech therapy, and medical social work. The company's mission is to enhance the quality of life for its patients through compassionate care and innovative healthcare solutions.
How the Company Makes MoneyEnhabit, Inc. generates revenue primarily through its home health and hospice services. The company's revenue model is based on providing these services to patients, who are typically covered by Medicare, Medicaid, or private insurance plans. Enhabit receives reimbursement from these payers for the healthcare services delivered to patients. Key revenue streams include skilled nursing visits, therapy sessions, and hospice care services. Additionally, strategic partnerships with healthcare providers and facilities help Enhabit expand its reach and access a broader patient base, further contributing to its earnings.

Enhabit, Inc Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 27.20%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in admissions and revenue in both the home health and hospice segments. There were also notable improvements in cost efficiency and financial performance. However, there were challenges such as a decline in total home health census and a year-over-year decrease in consolidated revenue. Branch closures were also a concern. Overall, the positive aspects of growth and financial improvements slightly outweigh the negative aspects.
Q1-2025 Updates
Positive Updates
Home Health Admissions Growth
Admissions increased by 8.1% from Q4 to Q1, with fee-for-service growing 4% sequentially. Year-over-year admission growth was up 0.7% and normalized growth was 2.5%.
Growth in Non-Medicare Revenue
Non-Medicare admissions increased by 7.4% year-over-year, driven by payer innovation contracts. Non-Medicare revenue per visit improved by 7.6% year-over-year.
Hospice Segment Performance
Total admissions grew 8% year-over-year with 5.2% same-store growth. Census grew by 12.3% with 10.6% same-store growth.
Cost Efficiency Improvements
Cost per day decreased by 0.8% year-over-year and 2.7% sequentially in the hospice segment. Completed transition to outsourced coding resource expected to save $1.5 million for 2025.
Financial Performance
Home health segment EBITDA improved by 7.9% sequentially. Hospice segment EBITDA grew by 65% year-over-year. Q1 2025 leverage ratio improved to 4.4x.
Balance Sheet and Cash Flow
Generated approximately $17 million of free cash flow and reduced overall bank debt by $25 million in the quarter.
Negative Updates
Decline in Total Home Health Census
Total home health census was down 2.4% year-over-year due to a low entry point in January.
Decreased Revenue Year-over-Year
Consolidated net revenue decreased by $2.5 million or 1.0% year-over-year.
Branch Closures
Seven branches were closed or consolidated in the first quarter, with four more expected to close by the end of Q2 2025.
Company Guidance
During Enhabit Home Health & Hospice's first quarter 2025 earnings call, several key performance metrics and strategic initiatives were highlighted. The company reported an 8.1% increase in admissions from Q4 2024 to Q1 2025, with fee-for-service admissions growing by 4% sequentially. Year-over-year admission growth normalized for Leap Year and branch closures was up 2.5%. Total home health census increased by 3.7% sequentially, despite a 2.4% year-over-year decline due to a low entry point in January. Non-Medicare admissions rose by 7.4% year-over-year, driven by payer innovation contracts, which accounted for 44% of non-Medicare visits in Q1 2025, up from 38% in Q1 2024. This shift contributed to a 7.6% increase in non-Medicare revenue per visit. Visits per episode decreased by 6.7% to 13.9%. In the hospice segment, admissions grew by 8% year-over-year, and the average daily census increased by 12.3%. The company also reported a 310 basis point improvement in referral-to-admission conversion year-over-year. Additionally, Enhabit completed the transition to outsourced coding resources, estimated to save $1.5 million in 2025, and closed or consolidated seven branches, with four more closures planned by the end of Q2 2025. The company reaffirmed its 2025 guidance based on strong Q1 results and business momentum.

Enhabit, Inc Financial Statement Overview

Summary
Enhabit, Inc. is facing financial challenges with declining revenue, negative profit margins, and moderate leverage. The stability of cash flows provides some liquidity cushion, but the overall financial health is under pressure due to operational inefficiencies and declining equity. Strategic improvements are necessary to enhance profitability and financial stability in the long term.
Income Statement
45
Neutral
Enhabit, Inc. has shown a concerning decline in financial performance. The company experienced negative EBIT and Net Income in the most recent year, reflecting operational challenges. The Gross Profit Margin remains relatively stable at 100%, indicating cost-effective operations, but the Net Profit Margin has turned negative due to high expenses relative to revenue. The revenue growth rate is declining, with a decrease in revenue seen in recent years.
Balance Sheet
50
Neutral
The balance sheet shows a significant drop in Stockholders' Equity, contributing to a concerning Debt-to-Equity Ratio of 0.15, which indicates a moderate leverage level. The Return on Equity (ROE) has turned negative, reflecting net losses. However, the equity ratio remains healthy at approximately 42.7%, indicating a solid asset base relative to equity.
Cash Flow
55
Neutral
Operating cash flow has remained stable, and free cash flow has shown some growth, providing some stability in liquidity. The Free Cash Flow to Net Income Ratio is positive due to operational cash generation, despite net losses. However, the overall growth in operating and free cash flows is modest, indicating limited cash flow improvements.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.03B1.03B1.05B1.08B1.11B1.08B
Gross Profit
481.80M504.00M510.70M557.50M592.70M540.70M
EBIT
-112.10M-115.10M-47.60M107.60M142.90M102.70M
EBITDA
-62.80M-83.60M-16.50M22.50M185.20M145.40M
Net Income Common Stockholders
-138.60M-156.20M-80.50M62.50M111.10M75.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
29.80M28.40M27.40M22.90M5.40M38.50M
Total Assets
1.47B1.23B1.43B1.65B1.72B1.62B
Total Debt
610.10M569.50M610.10M625.20M56.90M50.50M
Net Debt
580.30M541.10M582.70M602.30M51.50M12.00M
Total Liabilities
764.70M672.10M731.90M767.30M236.70M227.00M
Stockholders Equity
669.70M523.50M669.70M844.60M1.47B1.38B
Cash FlowFree Cash Flow
49.50M47.40M44.90M73.00M117.70M21.30M
Operating Cash Flow
51.80M51.20M48.40M80.10M123.30M24.90M
Investing Cash Flow
19.50M-2.40M-5.30M-42.30M-119.20M-3.00M
Financing Cash Flow
-69.90M-48.30M-40.50M-18.60M-36.10M-16.70M

Enhabit, Inc Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.43
Price Trends
50DMA
8.96
Positive
100DMA
8.69
Positive
200DMA
8.22
Positive
Market Momentum
MACD
0.47
Positive
RSI
68.95
Neutral
STOCH
66.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EHAB, the sentiment is Positive. The current price of 10.43 is above the 20-day moving average (MA) of 10.32, above the 50-day MA of 8.96, and above the 200-day MA of 8.22, indicating a bullish trend. The MACD of 0.47 indicates Positive momentum. The RSI at 68.95 is Neutral, neither overbought nor oversold. The STOCH value of 66.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EHAB.

Enhabit, Inc Risk Analysis

Enhabit, Inc disclosed 27 risk factors in its most recent earnings report. Enhabit, Inc reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We use, and may continue to expand our use of, machine learning and artificial intelligence ("AI") technologies to deliver our services and operate our business. Q4, 2024
2.
The transition of management or unexpected departure of our key officers could harm our business. Q4, 2024
3.
Pressures relating to downturns in the economy, including increased inflation, could adversely affect our business and consolidated financial statements. Q4, 2024

Enhabit, Inc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$8.51B27.8117.66%0.17%16.80%39.99%
HCHCA
72
Outperform
$91.94B16.98-230.22%0.70%7.30%11.60%
71
Outperform
$3.10B35.007.85%5.34%
69
Neutral
$993.74M37.9311.28%30.04%43.47%
55
Neutral
$527.90M-12.03%12.19%-1.59%
53
Neutral
$5.25B3.24-45.38%2.81%16.79%-0.06%
49
Neutral
$525.11M-22.81%-1.08%-65.84%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EHAB
Enhabit, Inc
10.62
1.46
15.94%
AMED
Amedisys
94.57
3.12
3.41%
HCA
HCA Healthcare
381.66
47.52
14.22%
ENSG
The Ensign Group
151.41
32.81
27.66%
PNTG
Pennant Group
28.88
6.14
27.00%
INNV
InnovAge Holding
3.96
-0.87
-18.01%

Enhabit, Inc Corporate Events

Financial Disclosures
Enhabit, Inc Reports Q1 2025 Financial Results
Positive
May 7, 2025

Enhabit, Inc. reported its first quarter 2025 financial results, highlighting a 3.7% sequential growth in home health census and a 12.3% year-over-year increase in hospice census. The company achieved a net income of $17.8 million and an adjusted EBITDA of $26.6 million, benefiting from improved profitability and a reduced leverage ratio, which allows for more favorable debt pricing and operational flexibility.

M&A TransactionsBusiness Operations and Strategy
Enhabit, Inc. Sells Medalogix Stake for $21 Million
Neutral
Mar 21, 2025

Enhabit, Inc. sold its investment interest in Medalogix, a healthcare predictive data and analytics company, for approximately $21 million following Medalogix’s merger with Forcura in a private equity-backed transaction on March 19, 2025. The proceeds from this sale are expected to be used by Enhabit, Inc. to reduce debt under its credit agreement, potentially impacting its financial stability and operations.

Business Operations and StrategyFinancial Disclosures
Enhabit, Inc. Reports Q4 2024 Financial Results
Neutral
Mar 5, 2025

Enhabit, Inc. reported its fourth-quarter results for 2024, highlighting a strategic focus on long-term growth in its home health and hospice segments. The company achieved a net service revenue of $258.2 million, despite a net loss of $46.0 million. Key achievements included a 10.7% increase in non-Medicare home health admissions and a 13.1% rise in hospice net service revenue. The company also reduced its bank debt by $10 million in Q4, totaling a $40 million reduction for 2024, and opened three new hospice locations in the same quarter.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.