Encompass Health Corporation (EHC) Hits Fresh High: Is There Still Room to Run?

Shares of Encompass Health (EHC) have been strong performers lately, with the stock up 4% over the past month. The stock hit a new 52-week high of $127.86 in the previous session. Encompass Health has gained 37.3% since the start of the year compared to the -2% move for the Zacks Medical sector and the 10.5% return for the Zacks Medical - Outpatient and Home Healthcare industry.What's Driving the Outperformance?The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on August 4, 2025, Encompass Health reported EPS of $1.4 versus consensus estimate of $1.2 while it beat the consensus revenue estimate by 2.29%.For the current fiscal year, Encompass Health is expected to post earnings of $5.24 per share on $5.92 in revenues. This represents a 18.28% change in EPS on a 10.23% change in revenues. For the next fiscal year, the company is expected to earn $5.73 per share on $6.44 in revenues. This represents a year-over-year change of 9.26% and 8.69%, respectively.Valuation MetricsThough Encompass Health has recently hit a 52-week high, what is next for Encompass Health? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.Encompass Health has a Value Score of B. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.In terms of its value breakdown, the stock currently trades at 24.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.4X. On a trailing cash flow basis, the stock currently trades at 16.8X versus its peer group's average of 17.7X. Additionally, the stock has a PEG ratio of 2.23. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.Zacks RankWe also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Encompass Health currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Encompass Health meets the list of requirements. Thus, it seems as though Encompass Health shares could still be poised for more gains ahead.How Does EHC Stack Up to the Competition?Shares of EHC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Aveanna Healthcare Holdings Inc. (AVAH). AVAH has a Zacks Rank of #1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of D.Earnings were strong last quarter. Aveanna Healthcare Holdings Inc. beat our consensus estimate by 350.00%, and for the current fiscal year, AVAH is expected to post earnings of $0.42 per share on revenue of $2.31 billion.Shares of Aveanna Healthcare Holdings Inc. have gained 9.4% over the past month, and currently trade at a forward P/E of 20.22X and a P/CF of 51.17X.The Medical - Outpatient and Home Healthcare industry may rank in the bottom 61% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for EHC and AVAH, even beyond their own solid fundamental situation.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Encompass Health Corporation (EHC): Free Stock Analysis Report Aveanna Healthcare Holdings Inc. (AVAH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks