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The Ensign Group (ENSG)
NASDAQ:ENSG
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The Ensign Group
(NASDAQ:ENSG)
78Outperform
The Ensign Group (ENSG) vs. S&P 500 (SPY)
Market Cap
$7.50B
Dividend Yield0.19%
Average Volume (3M)431.45K
Price to Earnings (P/E)25.5
Beta (1Y)0.51
Revenue Growth15.52%
EPS Growth40.29%
CountryUS
Employees39,300
SectorHealthcare
Sector Strength78
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)5.14
Shares Outstanding57,455,376
10 Day Avg. Volume491,968
30 Day Avg. Volume431,450
Financial Highlights & Ratios
PEG Ratio0.63
Price to Book (P/B)N/A
Price to Sales (P/S)1.73
Price to Cash Flow (P/CF)18.30
P/FCF Ratio18.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$166.00Price Target Upside23.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
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 shows strong revenue growth and profitability, effective cost management, and robust cash flows. However, increasing liabilities and the slight lag in net income growth compared to revenue growth warrant monitoring.Income Statement
The Ensign Group demonstrates strong revenue growth with a consistent upward trajectory from $2.03 billion in 2019 to $4.26 billion in 2024. Gross profit and net profit margins have also improved over the years, indicating healthy profitability. The EBIT and EBITDA margins are solid, reflecting effective cost management and operational efficiency. However, the pace of growth in net income lags slightly compared to revenue growth, which may indicate rising operational costs.87
Very Positive
Balance Sheet
The company maintains a robust equity base with a steadily increasing stockholders' equity, showing a healthy equity ratio. The debt-to-equity ratio is moderate, suggesting manageable leverage, but an increase in total debt over the years should be monitored. Return on equity (ROE) remains strong, indicating efficient use of equity capital. While the balance sheet is stable, the rising liabilities could pose future risks if not managed carefully.75
Positive
Cash Flow
Operating cash flow is strong and consistently exceeds net income, indicating excellent cash generation ability. Free cash flow growth is positive, although the growth rate has slowed recently. The free cash flow to net income ratio is healthy, reflecting prudent capital expenditure management. However, the decline in free cash flow from 2023 to 2024 warrants attention to ensure future liquidity remains robust.81
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.26B | 3.73B | 3.03B | 2.63B | 2.40B |
| Gross Profit | ||||
| 667.59M | 590.76M | 517.99M | 468.21M | 407.47M |
| EBIT | ||||
| 358.30M | 255.37M | 296.82M | 260.46M | 223.16M |
| EBITDA | ||||
| 461.46M | 353.24M | 360.38M | 320.84M | 281.54M |
| Net Income Common Stockholders | ||||
| 297.97M | 209.40M | 224.68M | 194.65M | 170.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 464.60M | 526.86M | 331.71M | 275.96M | 250.01M |
| Total Assets | ||||
| 4.67B | 4.18B | 3.45B | 2.85B | 2.55B |
| Total Debt | ||||
| 1.97B | 1.87B | 1.57B | 1.27B | 1.11B |
| Net Debt | ||||
| 1.51B | 1.36B | 1.26B | 1.00B | 877.45M |
| Total Liabilities | ||||
| 2.83B | 2.68B | 2.20B | 1.83B | 1.73B |
| Stockholders Equity | ||||
| 1.84B | 1.49B | 1.25B | 1.02B | 818.23M |
| Cash Flow | Free Cash Flow | |||
| 188.95M | 270.49M | 184.97M | 206.13M | 323.02M |
| Operating Cash Flow | ||||
| 347.19M | 376.67M | 272.51M | 275.68M | 373.35M |
| Investing Cash Flow | ||||
| -390.05M | -182.70M | -186.18M | -173.91M | -58.67M |
| Financing Cash Flow | ||||
| -2.16M | -612.00K | -32.26M | -76.14M | -137.30M |
The Ensign Group Technical Analysis
Positive
133.90
Price Trends
131.95
Positive
136.05
Negative
139.11
Negative
Market Momentum
-0.48
Negative
51.80
Neutral
52.62
Neutral
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 133.9 is above the 20-day moving average (MA) of 129.25, above the 50-day MA of 131.95, and below the 200-day MA of 139.11, indicating a neutral trend. The MACD of -0.48 indicates Negative momentum. The RSI at 51.80 is Neutral, neither overbought nor oversold. The STOCH value of 52.62 is Neutral, 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 (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $99.95B | 187.01 | 3.32% | 1.72% | 20.40% | 57.80% | |
78 Outperform | $7.50B | 25.50 | 17.90% | 0.19% | 15.52% | 40.29% | |
74 Outperform | $10.73B | 25.34 | 10.02% | 7.04% | 9.90% | 56.41% | |
71 Outperform | $569.81M | 29.60 | 10.11% | 7.19% | 3.60% | 24.76% | |
63 Neutral | $31.11B | 355.41 | 0.80% | 2.63% | 9.48% | ― | |
61 Neutral | $1.45B | 14.32 | 10.79% | 2.61% | 15.25% | 51.77% | |
48 Neutral | $6.86B | 1.11 | -50.22% | 2.47% | 16.71% | 1.53% |
* Healthcare Sector Average
Performance Comparison
ENSG
The Ensign Group
133.90
15.34
12.94%
WELL
Welltower
152.43
63.90
72.18%
NHC
National Healthcare
93.32
4.19
4.70%
OHI
Omega Healthcare
38.65
9.66
33.32%
VTR
Ventas
69.60
28.23
68.24%
UHT
Universal Health Realty Income
40.75
8.71
27.18%
The Ensign Group Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -10.01% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong positive sentiment due to record-breaking financial performance, significant operational growth, and optimistic future guidance. However, there were some concerns regarding regulatory changes and the acquisition process, which were overshadowed by the overall positive results and outlook.Highlights
Record Clinical and Financial Results
Ensign Group posted record clinical and financial results with significant growth in occupancy and skilled mix, reflecting strong market performance across their portfolio.
Occupancy and Skilled Mix Growth
Same-store and transitioning occupancy increased by 2.7% and 4.1%, respectively, for the year. Skilled days grew by 3.8% for same-store and 10.9% for transitioning operations. Managed care census rose by 6.6% and 27.7% for same-store and transitioning operations, respectively.
Strong Revenue and Earnings Growth
Total revenue increased by $2.2 billion over the last five years, representing a 109.2% increase. Diluted GAAP earnings per share grew by a compound annual growth rate of 25.6% from 2019 to 2024.
Expanded Operations and Acquisitions
Ensign Group added 57 operations across different markets, including 12 new operations during the quarter, enhancing their presence in states like Tennessee and Alabama.
2025 Guidance
Issued 2025 earnings guidance of $6.16 to $6.34 per diluted share and annual revenue guidance of $4.83 billion to $4.91 billion, signaling continued growth expectations.
Dividend and Deleveraging
Increased dividend for the 22nd consecutive year and achieved a record low lease-adjusted net debt to EBITDA ratio of 1.9 times.
Lowlights
Regulatory and Medicaid Reimbursement Concerns
Potential risks and uncertainties around Medicaid reimbursement and regulatory changes under the new administration, particularly affecting supplemental quality and incentive programs.
Operational Challenges
The acquisition and licensing process faced delays, particularly in Medicaid office approvals, affecting cash flow and operational turnaround.
Company Guidance
During The Ensign Group's Q4 earnings call, the company provided guidance for 2025, projecting earnings per diluted share between $6.16 and $6.34, and annual revenue between $4.83 billion and $4.91 billion. The guidance represents a 13.8% increase over the 2024 results and a 31% increase over 2023. The company reported a 109.2% revenue growth over the last five years, equating to a 15.9% compound annual growth rate (CAGR), while diluted GAAP earnings per share increased from $3.48 in 2019 to $5.12 in 2024, a 25.6% CAGR. Additionally, Ensign achieved a lease-adjusted net debt to EBITDA ratio of 1.9x and maintained significant liquidity with over a billion dollars available for future investments. The company also highlighted its expansion efforts, having added 57 operations in 2024, and plans to continue leveraging acquisition opportunities, particularly in new markets like Alabama, Alaska, and Oregon.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.