Ensign Group (ENSG) Down 5.1% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Ensign Group (ENSG). Shares have lost about 5.1% in that time frame, outperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Ensign Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Ensign Group Q4 Earnings Beat On Improved OccupancyEnsign Group reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.49, which outpaced the Zacks Consensus Estimate by 1.4%. The bottom line improved 16.4% year over year.Operating revenues advanced 15.5% year over year to $1.1 billion. The top line beat the consensus mark by 0.8%.Ensign Group’s fourth-quarter 2024 results benefited from improved occupancy rates, higher patient days and higher skilled service revenues. However, an elevated expense level due to higher cost of services and rent-cost of services, partially offset the positives.Ensign Group’s Q4 UpdateEnsign Group’s adjusted net income of $87.6 million rose 18.9% year over year and beat our estimate of $86.2 million.Same-facilities occupancy improved 230 basis points (bps) while transitioning-facilities occupancy expanded 470 bps year over year.Total expenses increased 7.7% year over year to $1.03 billion, higher than our estimate of $1.02 billion.Ensign Group’s Segmental UpdateSkilled Services: The segment recorded revenues of $1.08 billion in the fourth quarter, which advanced 15.1% year over year and almost matched the Zacks Consensus Estimate as well as our estimate. The metric was aided by improved occupancy and improved patient days. Segment income rose 20.7% year over year to $141 million.Skilled nursing facilities and campus operations of the segment totaled 286 and 30, respectively, at the fourth-quarter end.Standard Bearer: Rental revenues improved 14.8% year over year to $25.1 million but fell short of our estimate of $27.3 million. The metric was supported by buyouts. Segmental income was $7.4 million, which dipped 1.4% year over year. Funds from operations increased 7.3% year over year to $15.3 million.Ensign Group’s Financial Update (as of Dec. 31, 2024)Ensign Group exited the fourth quarter with cash and cash equivalents of $464.6 million, which declined 8.8% from the 2023-end figure. It had a leftover capacity of $572.1 million under its line of credit at the fourth-quarter end.Total assets of $4.7 billion increased 11.8% from the level at 2023-end.Long-term debt-less current maturities were $141.6 million, down 2.7% from the figure as of Dec. 31, 2023. Current maturities of long-term debt amounted to $4.1 million.Total equity of $1.8 billion advanced 22.9% from the 2023-end figure.Ensign Group generated net cash from operations of $347.2 million in 2024, which fell 7.8% from the 2023 figure.Ensign Group’s Capital-Deployment UpdateEnsign Group did not buy back shares in 2024. In the same time frame, management paid dividends worth $13.7 million.Ensign Group’s 2025 Outlook UnveiledRevenues are forecasted to lie within $4.83-$4.91 billion, the mid-point of which indicates an improvement of 14.3% from the 2024 figure of $4.26 billion.Adjusted EPS is forecasted to be between $6.16 and $6.34, the midpoint of which implies 13.8% growth from the 2024 figure of $5.50.The weighted average common shares outstanding is estimated to be around 59.5 million and the tax rate is assumed to be 25%.How Have Estimates Been Moving Since Then?It turns out, estimates review have trended upward during the past month.VGM ScoresCurrently, Ensign Group has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Ensign Group has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>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 The Ensign Group, Inc. (ENSG): 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