The Ensign Group (ENSG) AI Stock Analysis

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The Ensign Group

(NASDAQ:ENSG)

78Outperform

The Ensign Group's overall stock score reflects its robust financial performance, positive earnings call, and strategic growth initiatives. While technical analysis presents mixed signals, the company's strong financial health and optimistic future guidance contribute significantly to its score. Valuation is fair but suggests limited immediate upside. Overall, the company is well-positioned in the medical care facilities industry, with promising growth prospects tempered by some technical and valuation considerations.

The Ensign Group (ENSG) vs. S&P 500 (SPY)

Market Cap

$8.14B

Dividend Yield0.17%

Average Volume (3M)446.02K

Price to Earnings (P/E)26.6

Beta (1Y)0.30

Revenue Growth16.80%

EPS Growth39.99%

CountryUS

Employees39,300

SectorHealthcare

Sector Strength39

IndustryMedical - Care Facilities

Share Statistics

EPS (TTM)1.52

Shares Outstanding57,492,350

10 Day Avg. Volume416,115

30 Day Avg. Volume446,020

Financial Highlights & Ratios

PEG Ratio6.98

Price to Book (P/B)4.05

Price to Sales (P/S)0.00

P/FCF Ratio37.00

Enterprise Value/Market Cap1.18

Enterprise Value/Revenue0.57

Enterprise Value/Gross Profit14.17

Enterprise Value/Ebitda5.82

Forecast

1Y Price Target

$177.00

Price Target Upside22.25% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

The Ensign Group Business Overview & Revenue Model

Company DescriptionThe Ensign Group, Inc. provides health care services in the post-acute care continuum and other ancillary businesses. The company operates in two segments, Skilled Services and Real Estate. The company offers skilled services, which include short and long-term nursing care services for patients with chronic conditions, prolonged illness, and the elderly; and physical, occupational, and speech therapies and other rehabilitative and healthcare services. It also provides standard services, such as room and board, special nutritional programs, social, recreational, entertainment, and other services. In addition, the company offers senior living, as well as mobile diagnostics services; leases real estate properties; and provides other ancillary services consisting of digital x-ray, ultrasound, electrocardiogram, laboratory, sub-acute, and patient transportation services to people in their homes or at long-term care facilities. As of April 4, 2022, it operated 252 healthcare facilities in Arizona, California, Colorado, Idaho, Iowa, Kansas, Nebraska, Nevada, South Carolina, Texas, Utah, Washington, and Wisconsin. The company was incorporated in 1999 and is based in San Juan Capistrano, California.

How the Company Makes MoneyThe Ensign Group generates revenue primarily through the operation of its healthcare facilities, which include skilled nursing, assisted living, and rehabilitative care centers. The company earns money by providing a variety of services to its residents and patients, including room and board, nursing care, therapy services, and other ancillary services. Revenue streams are largely derived from private payers, government programs such as Medicare and Medicaid, and managed care organizations. Additionally, Ensign Group's growth strategy involves acquiring and developing new facilities, which can contribute to increased revenue. Key partnerships with healthcare providers and payers also play a role in enhancing service delivery and optimizing financial performance.

The Ensign Group Financial Statement Overview

Summary

The Ensign Group exhibits robust financial health with strong revenue and profit growth. The company's operational efficiency is evident in stable gross profit margins and improved net profit margins. The balance sheet is solid, with a healthy equity base and moderate debt levels. While cash flow generation is strong, there is room to enhance free cash flow conversion.

Income Statement

Very Positive

The Ensign Group shows a strong revenue growth trajectory with a 19.64% increase from 2023 to the TTM (Trailing-Twelve-Months) period. Gross profit margins have remained stable, and the net profit margin has improved to 7.00% in the TTM period, indicating enhanced profitability. EBIT and EBITDA margins are also well-maintained, showcasing operational efficiency.

Balance Sheet

Very Positive

The company's balance sheet reflects a solid equity base with an equity ratio of 40.47% in the TTM period. The debt-to-equity ratio is moderate at 0.97, indicating a balanced approach to leveraging. Return on Equity (ROE) is healthy at 16.06%, showing effective use of shareholders' funds.

Cash Flow

Very Positive

The Ensign Group has demonstrated consistent growth in free cash flow, with a 12.40% increase in the TTM period. The Operating Cash Flow to Net Income ratio is at 1.24, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio is slightly lower at 0.69, suggesting room for improvement in turning profits into free cash flow.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.42B	4.26B	3.73B	3.03B	2.63B	2.40B
	Gross Profit
676.18M	667.59M	590.76M	517.99M	468.21M	407.47M
	EBIT
377.62M	358.30M	255.37M	296.82M	260.46M	223.16M
	EBITDA
495.95M	461.46M	353.24M	360.38M	320.84M	281.54M
	Net Income Common Stockholders
309.42M	297.97M	209.40M	224.68M	194.65M	170.48M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
526.30M	526.85M	526.86M	331.71M	275.96M	250.01M
	Total Assets
4.31B	4.67B	4.18B	3.45B	2.85B	2.55B
	Total Debt
1.94B	1.97B	1.87B	1.57B	1.27B	1.11B
	Net Debt
1.42B	1.51B	1.36B	1.26B	1.00B	877.45M
	Total Liabilities
2.72B	2.83B	2.68B	2.20B	1.83B	1.73B
	Stockholders Equity
1.58B	1.84B	1.49B	1.25B	1.02B	818.23M
Cash Flow		Free Cash Flow
212.37M	188.95M	270.49M	184.97M	206.13M	323.02M
	Operating Cash Flow
384.09M	347.19M	376.67M	272.51M	275.68M	373.35M
	Investing Cash Flow
-599.23M	-390.05M	-182.70M	-186.18M	-173.91M	-58.67M
	Financing Cash Flow
-9.63M	-2.16M	-612.00K	-32.26M	-76.14M	-137.30M

The Ensign Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price144.79

Price Trends

50DMA

129.80

Positive

100DMA

131.90

Positive

200DMA

139.27

Positive

Market Momentum

MACD

3.68

Negative

RSI

74.46

Negative

STOCH

95.17

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ENSG, the sentiment is Positive. The current price of 144.79 is above the 20-day moving average (MA) of 131.15, above the 50-day MA of 129.80, and above the 200-day MA of 139.27, indicating a bullish trend. The MACD of 3.68 indicates Negative momentum. The RSI at 74.46 is Negative, neither overbought nor oversold. The STOCH value of 95.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ENSG.

The Ensign Group Risk Analysis

The Ensign Group disclosed 54 risk factors in its most recent earnings report. The Ensign Group reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

The Ensign Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (52)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENSG	78 Outperform	$8.14B	26.60	17.66%	0.17%	16.80%	39.99%
THC	78 Outperform	$14.65B	10.55	38.12%	―	-1.79%	-41.85%
NHC	76 Outperform	$1.63B	15.25	11.19%	2.31%	19.16%	31.92%
UHS	73 Outperform	$12.38B	10.79	18.35%	0.42%	9.73%	51.87%
EHC	68 Neutral	$11.85B	24.28	25.33%	0.56%	11.21%	30.38%
SEM	64 Neutral	$1.96B	11.34	10.38%	2.90%	-8.86%	-36.22%
Sector *	52 Neutral	$5.14B	3.39	-43.55%	2.83%	16.49%	-0.19%

* Healthcare Sector Average

Performance Comparison

ENSG

The Ensign Group

144.79

25.73

21.61%

EHC

Encompass Health

119.27

32.79

37.92%

NHC

National Healthcare

108.14

10.13

10.34%

SEM

Select Medical

14.87

-3.74

-20.10%

THC

Tenet Healthcare

159.57

26.60

20.00%

UHS

Universal Health

187.83

6.32

3.48%

The Ensign Group Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: 13.01%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant achievements in revenue, occupancy, and expansion, alongside raising financial guidance. Despite the competitive environment and policy uncertainties, the company's strong financial position and growth opportunities present a positive outlook.

Q1-2025 Updates

Positive Updates

Record-Setting Quarter

The company achieved all-time highs in same-store and transitioning occupancy, which increased to 82.6% and 83.5% respectively. Skilled census for same-store and transitioning operations increased by 7.6% and 9.9%, respectively.

Growth in Managed Care Census

Managed care census grew by 8.9% for same-store and 15.6% for transitioning operations over the prior year quarter.

Expansion and Acquisitions

The company added 47 new operations since January 2024, expanding across almost every market served.

Increased Earnings Guidance

Annual 2025 earnings guidance was raised to between $6.22 and $6.38 per diluted share, up from $6.16 to $6.34, representing a 14.5% increase over 2024 results.

Revenue Guidance Increase

Annual revenue guidance was increased to $4.89 billion to $4.94 billion, up from $4.83 billion to $4.91 billion.

Strong Financial Position

Lease adjusted net debt-to-EBITDA ratio of 2.13 times with over $1 billion in dry powder for future growth.

Dividend Increase

The company paid a quarterly cash dividend of $0.0625 per common share, marking 22 consecutive years of annual dividend increases.

Negative Updates

Staffing Challenges

The overall sector has not fully recovered the workforce levels lost during COVID-19, though the company itself has seen recovery.

Competitive Deal Environment

Competition for deals remains strong, primarily from private equity and family-based funds.

Policy Uncertainty

Ongoing policy discussions in Washington regarding Medicaid funding and provider tax present uncertainties.

Company Guidance

During The Ensign Group's first-quarter earnings call for fiscal year 2025, the company reported significant milestones and upward revised guidance metrics. The quarter saw record highs in same-store and transitioning occupancy rates, which reached 82.6% and 83.5%, respectively, representing substantial increases over the prior year. The skilled census for both same-store and transitioning operations rose by 7.6% and 9.9%, respectively, while managed care census grew by 8.9% and 15.6%. Additionally, the company announced an increase in its annual earnings guidance to between $6.22 and $6.38 per diluted share, up from the previous range of $6.16 to $6.34, marking a 14.5% increase over 2024 results and a 32% rise from 2023. The annual revenue guidance was also raised to between $4.89 billion and $4.94 billion, reflecting the quarter's growth and anticipated acquisitions. This optimistic outlook is supported by the company's ongoing strategic expansion, having added 47 new operations since January 2024, showcasing both organic growth potential and successful integration of new acquisitions.

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.