Here's Why Ensign Group Shares Are Attracting Investors Now

The Ensign Group Inc. ENSG is a healthcare services company that provides services in the post-acute care continuum, urgent care centers and mobile ancillary businesses in the United States. It is also engaged in the acquisition, development and leasing of skilled nursing, and provides senior living services. ENSG has risen 26.5% in the year-to-date period, outperforming the industry’s average gain of 17%.

Headquartered in San Juan Capistrano, CA, ENSG holds a market capitalization of $9.6 billion. The company operates through two reportable segments: Skilled Services and Standard Bearer. It has been expanding its portfolio, which now includes 361 healthcare operations, featuring 47 senior living facilities, spread across 17 states.

Courtesy of solid prospects, ENSG currently carries a Zacks Rank #2 (Buy).

Where Do Estimates for ENSG Stand?

The Zacks Consensus Estimate for Ensign Group’s 2025 earnings is pegged at $6.39 per share, indicating a 16.2% year-over-year rise. In the past 60 days, the company has witnessed three upward estimate revisions against none in the opposite direction. Furthermore, the consensus mark for revenues is pegged at $5 billion for 2025, implying a 17.2% year-over-year rise. ENSG beat earnings estimates in each of the past four quarters, with an average surprise of 1.9%.

The Ensign Group, Inc. Price and EPS Surprise

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

ENSG’s Growth Drivers

Ensign Group’s revenues have grown over the past few years, primarily driven by service revenues, strategic acquisitions and rental income. In the second quarter of 2025, its operating revenues rose 18.5% year over year, surpassing the Zacks Consensus Estimate by 1.8%. The company increased its expectation for revenue guidance to a range of $4.99-$5.02 billion for 2025, up from the prior band of $4.89 billion to $4.94 billion.

The combination of improvements in occupancy and skilled mix in its operations, along with long-term growth in acquired operations, demonstrates organic growth potential. The company aims to continue optimizing operational efficiencies, expand services and create new partnerships, which will drive further improvements in occupancy and skilled mix.

ENSG’s Skilled Services unit’s revenues witnessed 18.4% year-over-year growth in the second quarter of 2025 to $1.2 billion. Its Standard Bearer segment’s revenues grew 34.7% year over year to $31.5 million in the same quarter. The company increased its 2025 adjusted EPS guidance range to $6.34-$6.46, up from the earlier view of $6.22-$6.38.

Its total debt is 6.6% of its capital, which is significantly lower than the industry’s average of 87.8%. Ensign Group bought back shares worth $20 million in the first half of 2025 and paid dividends worth $7.2 million. This highlights its shareholder value-boosting efforts.

ENSG: Risks to Watch

There are some factors, however, that investors should keep a careful eye on.

The company’s total expenses have escalated over the last several years due to higher costs of services and rent. Total expenses witnessed a year-over-year increase of 27.3% in 2023, 12.3% in 2024 and 16.9% in the first half of 2025. We expect total expenses to rise 17.1% year over year in 2025. The persistent escalation of expenses might weigh on its margin growth. Ensign Group's valuation looks expensive at the current level. It has a forward 12-month P/S ratio of 1.81X, which compares unfavorably with its five-year median of 1.56X.

Other Stocks to Consider

Some other top-ranked stocks in the Medical space are Tenet Healthcare Corporation THC, GeneDx Holdings Corp WGS and InfuSystem Holdings, Inc. INFU, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Tenet Healthcare’s current-year earnings of $15.54 per share has witnessed nine upward revisions in the past 60 days against no movement in the opposite direction. Tenet Healthcare beat earnings estimates in each of the trailing four quarters, with the average surprise being 31.2%. The consensus estimate for current-year revenues is pegged at $21.2 billion, suggesting 2.4% year-over-year growth.

The Zacks Consensus Estimate for GeneDx Holdings’ current-year earnings of $1.60 per share has witnessed two upward revisions in the past 60 days, against no movement in the opposite direction. GeneDx Holdings beat earnings estimates in each of the trailing four quarters, with the average surprise being 231.4%. The consensus estimate for current-year revenues is pegged at $411.2 million, suggesting 34.6% year-over-year growth.

The Zacks Consensus Estimate for InfuSystem Holdings’ current-year earnings of 26 cents per share has witnessed one upward revision in the past 60 days, against no movement in the opposite direction. InfuSystem Holdings beat earnings estimates in two of the trailing four quarters, missed once and met once, with an average surprise of 79.2%. The consensus estimate for current-year revenues is pegged at $144.2 million, suggesting 6.9% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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