Ensign Group Shares Decline 2.2% Despite Q3 Earnings Beat

Shares of The Ensign Group, Inc. ENSG have fallen 2.2% since it reported third-quarter 2025 results on Nov. 3. Despite an earnings beat, the quarterly results were hurt by an elevated expense level due to higher cost of services, rent cost of services and general and administrative expenses. Nevertheless, the negatives were partly offset by improved occupancy rates, higher patient days and higher skilled service revenues.

ENSG reported a third-quarter 2025 adjusted EPS of $1.64, which beat the Zacks Consensus Estimate by 3.1%. The bottom line improved 18% year over year.

Operating revenues advanced 19.8% year over year to $1.3 billion. The top line surpassed the consensus mark by 2.5%.

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 Q3 Update

Ensign Group’s adjusted net income of $96.5 million rose 18.9% year over year in the quarter under review.

Same-facilities occupancy improved 210 basis points (bps), while transitioning-facilities occupancy increased 360 bps year over year.

Total expenses escalated 20.9% year over year to $1.2 billion, higher than our estimate by 3.6%.

Ensign Group’s Segmental Update

Skilled Services: The segment’s revenues were $1.2 billion in the third quarter, which grew 19.9% year over year and beat our estimate by 1.6%. The metric benefited on the back of higher occupancy rates and improved patient days. Segment income of $153.1 million advanced 19.2% year over year.

Skilled nursing facilities and campus operations of the segment totaled 314 and 31, respectively, at the end.

Standard Bearer: Rental revenues climbed 33.5% year over year to $32.6 million in the quarter under review. The metric was aided by buyouts. Segment income of $9.6 million advanced 32.3% year over year.

Funds from operations were $19.3 million, which increased 31% year over year.

ENSG’s Financial Update (As of Sept. 30, 2025)

Ensign Group exited the third quarter with cash and cash equivalents of $443.7 million, which fell 4.5% from the 2024-end figure. It had a leftover capacity of $592.6 million under its line of credit at the third-quarter end.

Total assets of $5.2 billion increased 11.9% from the level at 2024-end.

Long-term debt — less current maturities — was $138.6 million, down 2.1% from the figure as of Dec. 31, 2024. Current maturities of long-term debt amounted to $4.2 million.

Total equity of $2.1 billion advanced 15.3% from the 2024-end figure.

ENSG generated net cash from operations of $381 million in the first nine months of 2025, which increased 54.4% year over year.

Ensign Group’s Capital-Deployment Update

Ensign Group didn’t buy back shares in the third quarter of 2025. In the first nine months of 2025, management paid dividends worth $10.8 million.

ENSG Raises 2025 Outlook

Revenues are forecasted to lie between $5.05 billion and $5.07 billion, up from the prior view of $4.99-$5.02 billion. The mid-point of the revised outlook indicates an improvement of 18.8% from the 2024 figure.

Adjusted EPS is anticipated to be within $6.48-$6.54 for 2025, higher than the earlier view of $6.34-$6.46. The mid-point of the updated guidance indicates 18.4% 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 & Key Picks

ENSG currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Medical space are Exact Sciences Corporation EXAS, Universal Health Services, Inc. UHS and Veracyte, Inc. VCYT, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Exact Sciences’ current-year earnings of 43 cents per share has witnessed three upward revisions in the past 30 days against no movement in the opposite direction. Exact Sciences beat earnings estimates in each of the trailing four quarters, with the average surprise being 352.3%. The consensus estimate for current-year revenues is pegged at $3.2 billion, suggesting 17% year-over-year growth.

The Zacks Consensus Estimate for Universal Health’s current-year earnings of $21.67 per share has witnessed six upward revisions in the past 30 days against no movement in the opposite direction. Universal Health beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.2%. The consensus estimate for current-year revenues is pegged at $17.4 billion, suggesting 9.7% year-over-year growth.

The Zacks Consensus Estimate for Veracyte’s current-year earnings of $1.42 per share has witnessed one upward revision in the past 60 days against no movement in the opposite direction. Veracyte beat earnings estimates in each of the trailing four quarters, with an average surprise being 45.1%. The consensus estimate for current-year revenues is pegged at $508.3 million, suggesting 14% year-over-year growth.

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