ENSG's Q2 Earnings Beat on Higher Occupancy Rates, Stock Up 9%

Shares of The Ensign Group, Inc. ENSG gained 8.9% on July 25. The quarterly results benefited on the back of strong revenue growth across its Skilled Services segment, improved occupancy rates and solid growth in rental revenues. A hike in 2025 adjusted earnings per share (EPS) guidance may have also intrigued investors’ sentiment. However, the upside is partly offset by an elevated expense level resulting from the higher cost of services, rent-cost of services and general and administrative expenses. 

ENSG reported second-quarter 2025 adjusted EPS of $1.59, which beat the Zacks Consensus Estimate by 3.3%. The bottom line improved 20.5% year over year. 

Operating revenues advanced 18.5% year over year to $1.2 billion. The top line surpassed the consensus mark by 1.8%.

The Ensign Group, Inc. Price, Consensus and EPS Surprise

The Ensign Group, Inc. price-consensus-eps-surprise-chart | The Ensign Group, Inc. Quote

ENSG’s Q2 Update

Ensign Group’s adjusted net income of $93.3 million rose 22.1% year over year in the quarter under review. 

Same-facilities occupancy improved 160 basis points (bps) while transitioning-facilities occupancy increased 370 bps year over year.

Total expenses escalated 18.3% year over year to $1.12 billion, higher than our estimate of $1.08 billion.

Ensign Group’s Segmental Update

Skilled Services: The segment’s revenues were $1.17 billion in the second quarter, which grew 18.4% year over year and marginally beat the Zacks Consensus Estimate of $1.15 billion and our estimate of $1.14 billion. The metric benefited on the back of higher occupancy rates and improved patient days. Segment income of $150 million advanced 22.8% year over year.

Skilled nursing facilities and campus operations of the segment totaled 303 and 31, respectively, at the end.

Standard Bearer: Rental revenues climbed 34.7% year over year to $31.5 million in the quarter under review. The metric was aided by buyouts. Segment income of $9.1 million advanced 24% year over year. 

Funds from operations were $18.4 million, which increased 26.6% year over year.

ENSG’s Financial Update (as of June 30, 2025)

Ensign Group exited the second quarter with cash and cash equivalents of $364 million, which fell 21.7% from the 2024-end figure. It had a leftover capacity of $592.6 million under its line of credit at the second-quarter end.

Total assets of $4.9 billion increased 5.6% from the level at 2024-end.

Long-term debt-less current maturities were $139.6 million, down 1.4% from the figure as of Dec. 31, 2024. Current maturities of long-term debt amounted to $4.2 million.

Total equity of $2 billion advanced 9.8% from the 2024-end figure.

ENSG generated net cash from operations of $228 million in the first half of 2025, which more than doubled year over year.

Ensign Group’s Capital-Deployment Update

Ensign Group bought back shares worth $20 million in the first half of 2025. In the same time frame, management paid dividends worth $7.2 million.

ENSG’s 2025 Outlook Revised

Revenues are forecasted to lie between $4.99 billion and $5.02 billion, up from the prior view of $4.89-$4.94 billion. The mid-point of the revised outlook indicates an improvement of 17.5% from the 2024 figure. 

Adjusted EPS is anticipated within $6.34-$6.46 for 2025, higher than the earlier view of $6.22-$6.38. The mid-point of the updated guidance indicates 16.4% growth from the 2024 figure.

The weighted average common shares outstanding is currently estimated at around 59 million and the tax rate is reiterated to be 25%.

ENSG’s Zacks Rank

Ensign Group currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Medical Sector Releases

Of the Medical sector players that have reported second-quarter 2025 results so far, the bottom-line results of Tenet Healthcare Corporation THC, HCA Healthcare, Inc. HCA and Edwards Lifesciences Corporation EW beat the respective Zacks Consensus Estimate.

Tenet Healthcare reported second-quarter 2025 adjusted EPS of $4.02, which surpassed the Zacks Consensus Estimate by 41.6%. The bottom line soared 74% year over year.  Net operating revenues advanced 3.2% year over year to $5.3 billion. The top line beat the consensus mark by 2.4%. Adjusted net income of $369 million climbed 63.3% year over year in the quarter under review. Adjusted EBITDA improved 18.6% year over year to $1.1 billion. 

The Hospital Operations and Services segment recorded net operating revenues of $4 billion, which inched up 0.9% year over year. Adjusted EBITDA climbed 25.1% year over year to $623 million. Adjusted EBITDA margin of 15.6% improved 300 bps year over year. The Ambulatory Care segment’s net operating revenues rose 11.3% year over year to $1.3 billion. Adjusted EBITDA was $498 million, which advanced 11.4% year over year. 

HCA Healthcare’s second-quarter 2025 adjusted EPS of $6.84 surpassed the Zacks Consensus Estimate by 10.5%. The bottom line improved 24.4% year over year. Revenues were $18.6 billion, which advanced 6.4% year over year. The top line beat the consensus mark by 0.7%. Same-facility equivalent admissions grew 1.7% year over year in the second quarter, while same-facility admissions increased 1.8% year over year. 

Same-facility revenue per equivalent admission advanced 4% year over year. Same-facility inpatient surgeries dipped 0.3% year over year. Same-facility outpatient surgeries slipped 0.6% year over year. Additionally, same-facility emergency room visits inched up 1.3% year over year in the quarter under review.  Adjusted EBITDA improved 8.4% year over year to $3.8 billion, which beat our estimate of $3.6 billion. HCA Healthcare operated 191 hospitals and roughly 2,500 ambulatory sites of care across 20 states and the United Kingdom as of June 30, 2025.

Edwards Lifesciences reported second-quarter 2025 adjusted EPS of 67 cents, which surpassed the Zacks Consensus Estimate by 8.1%. The figure increased 8.1% from the year-ago quarter’s level. Sales totaled $1.53 billion, up 11.7% year over year. The metric surpassed the Zacks Consensus Estimate by 2.7%. Global sales in the Transcatheter Aortic Valve Replacement product group amounted to $1.10 billion, up 8.9% year over year or 7.8% at constant currency (CER).  

In Transcatheter Mitral and Tricuspid Therapies, sales totaled $134.5 million, up 61.9% from the prior-year figure on a reported basis (up 57.1% at CER). The Surgical Structural Heart segment delivered sales of $267 million, up 7.7% from the year-ago level on a reported basis and 6.8% at CER. The gross profit was $1.19 billion, up 8.6% year over year. The gross margin contracted 236 bps to 77.5% due to a 25% increase in the cost of sales. The operating margin contracted 62 bps to 26.7%.

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