On April 30, it was revealed in an SEC filing that DOUGLAS COLTHARP, EVP & Chief Financial Officer at Encompass Health EHC executed a significant exercise of company stock options.
What Happened: In an insider options sale disclosed in a Form 4 filing on Wednesday with the U.S. Securities and Exchange Commission, COLTHARP, EVP & Chief Financial Officer at Encompass Health, exercised stock options for 43,575 shares of EHC. The transaction value amounted to $3,688,791.
Encompass Health shares are trading, exhibiting down of 0.71% and priced at $116.16 during Thursday’s morning. This values COLTHARP’s 43,575 shares at $3,688,791.
Unveiling the Story Behind Encompass Health
Encompass Health Corp provides post-acute healthcare services in the United States through a network of inpatient rehabilitation hospitals. Inpatient rehabilitation contributes the majority of the firm’s revenue and provides specialized rehabilitative treatment through a network of inpatient hospitals. These hospitals are concentrated in the eastern half of the United States and Texas.
Encompass Health: Financial Performance Dissected
Positive Revenue Trend: Examining Encompass Health’s financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 3.59% as of 31 March, 2025, showcasing a substantial increase in top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Health Care sector.
Evaluating Earnings Performance:
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Gross Margin: With a low gross margin of 43.35%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.
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Earnings per Share (EPS): Encompass Health’s EPS is significantly higher than the industry average. The company demonstrates a robust bottom-line performance with a current EPS of 1.5.
Debt Management: Encompass Health’s debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 1.25.
Understanding Financial Valuation:
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Price to Earnings (P/E) Ratio: With a higher-than-average P/E ratio of 24.07, Encompass Health’s stock is perceived as being overvalued in the market.
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Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 2.17 as compared to the industry average, the stock might be considered overvalued based on sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an impressive EV/EBITDA ratio of 11.51, Encompass Health demonstrates exemplary market valuation, surpassing industry averages.
Market Capitalization Highlights: Above the industry average, the company’s market capitalization signifies a significant scale, indicating strong confidence and market prominence.
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Uncovering the Importance of Insider Activity
Insightful as they may be, insider transactions should be considered alongside a thorough examination of other investment criteria.
In the context of legal matters, the term “insider” refers to any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities, as outlined by Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are obligated to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
Pointing towards optimism, a company insider’s new purchase signals their positive anticipation for the stock to rise.
Despite insider sells not always signaling a bearish sentiment, they can be driven by various factors.
Transaction Codes To Focus On
When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
Check Out The Full List Of Encompass Health’s Insider Trades.
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This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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