EHC Should I Buy
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Encompass Health Corp (EHC) is a good buy for a beginner investor with a long-term focus and $50,000-$100,000 available for investment. The company demonstrates strong financial performance, positive growth trends, and favorable analyst sentiment. Despite insider selling, the long-term growth potential and solid fundamentals make it a suitable investment.
The MACD is positive and expanding (2.34), indicating bullish momentum. RSI is at 81.992, signaling overbought conditions, but this may not deter long-term investors. The stock is trading near resistance (R1: 112.389), with support at S1: 94.863. Moving averages are converging, suggesting a potential continuation of the current trend.
Strong Q4 financial performance with revenue up 9.9% YoY and net income up 21.65% YoY.
FY26 guidance indicates continued growth with revenue expected between $6.365 billion and $6.465 billion and EPS between $5.81 and $6.
Analyst upgrade by Barclays with a raised price target to $153 and an Overweight rating.
Insider selling has increased significantly (13423.86% over the last month).
The stock is overbought as indicated by RSI (81.992), which may lead to short-term corrections.
In Q4 2025, revenue increased by 9.94% YoY to $1.545 billion, net income rose by 21.65% YoY to $146.1 million, and EPS grew by 21.19% YoY to $1.43. Gross margin improved slightly to 90.23%. These figures indicate strong financial health and growth momentum.
Barclays recently raised the price target for EHC to $153 from $150, maintaining an Overweight rating. This reflects confidence in the company's future performance.
