ENCOMPASS HEALTH CORP (NYSE:EHC), the nation's largest operator of inpatient rehabilitation hospitals, reported financial results for the fourth quarter of 2025 that delivered a significant earnings beat, propelling its stock sharply higher in after-hours trading.
Earnings Snapshot: A Clear Beat on Profitability
The company's quarterly performance presented a mixed picture relative to Wall Street's expectations, but the market's reaction was decisively positive, focusing on robust profitability. For the quarter ended December 31, 2025, Encompass Health reported revenue of $1.54 billion, which represented a strong 9.9% increase compared to the same period last year. This figure came in slightly below the analyst consensus estimate of approximately $1.56 billion.
The standout figure, however, was non-GAAP earnings per share (EPS). The company reported EPS of $1.46, which surpassed the analyst estimate of $1.31 by a notable 12.1%. This earnings beat appears to be the primary catalyst for the positive investor sentiment.
- Reported Revenue: $1.54 billion (up 9.9% year-over-year)
- Analyst Revenue Estimate: ~$1.56 billion
- Reported Non-GAAP EPS: $1.46
- Analyst EPS Estimate: $1.31
Market Reaction and Forward Guidance
The market's response to the report was immediate and bullish. Following the earnings release, Encompass Health's stock surged approximately 17.5% in after-market trading. This dramatic move suggests investors are rewarding the company for its stronger-than-expected profitability and its outlook for the coming year.
Alongside the Q4 results, management issued financial guidance for the full year 2026. The company expects revenue to reach approximately $6.42 billion at the midpoint of its range. This projection is closely aligned with, and slightly above, the current analyst consensus estimate of $6.52 billion for 2026 sales. The reaffirmation of solid growth expectations, coupled with the Q4 earnings strength, has provided a clear signal of operational momentum.
Press Release Summary
The earnings announcement highlighted Encompass Health's position as the leading owner and operator of inpatient rehabilitation hospitals in the United States. The press release focused on the company's continued recovery-focused care model, which serves patients healing from major injuries, illnesses, and the debilitating after-effects of conditions like strokes and COVID-19. The issuance of 2026 guidance was a key component of the communication, providing investors with visibility into management's confidence in the business trajectory.
Looking Ahead
Analysts will now turn their attention to the company's execution against its stated goals for 2026. The current consensus estimates for the upcoming first quarter of 2026 anticipate revenue of $1.60 billion and earnings per share of $1.52. Investors will be watching to see if the operational efficiency demonstrated in Q4 2025 can be sustained.
For a detailed breakdown of historical earnings, future estimates, and analyst ratings, you can review the data here: Encompass Health Earnings & Estimates.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any securities. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
