Shares of The Ensign Group, Inc. ENSG lost 12% since it reported fourth-quarter 2024 results on Feb. 5, 2025. Despite an earnings beat, the quarterly results were hurt by an elevated expense level due to higher cost of services and rent-cost of services. Nevertheless, the downside was partly offset by improved occupancy rates, higher patient days and higher skilled service revenues. 

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ENSG reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.49, which outpaced the Zacks Consensus Estimate by 1.4%. The bottom line improved 16.4% year over year.

Operating revenues advanced 15.5% year over year to $1.1 billion. The top line beat the consensus mark by 0.8%.

ENSG’s Q4 Update

Ensign Group’s adjusted net income of $87.6 million rose 18.9% year over year and beat our estimate of $86.2 million.

Same-facilities occupancy improved 230 basis points (bps) while transitioning-facilities occupancy expanded 470 bps year over year.

Total expenses increased 7.7% year over year to $1.03 billion, higher than our estimate of $1.02 billion.

Ensign Group’s Segmental Update

Skilled Services: The segment recorded revenues of $1.08 billion in the fourth quarter, which advanced 15.1% year over year and almost matched the Zacks Consensus Estimate as well as our estimate. The metric was aided by improved occupancy and improved patient days. Segment income rose 20.7% year over year to $141 million.

Skilled nursing facilities and campus operations of the segment totaled 286 and 30, respectively, at the fourth-quarter end.

Standard Bearer: Rental revenues improved 14.8% year over year to $25.1 million but fell short of our estimate of $27.3 million. The metric was supported by buyouts. Segmental income was $7.4 million, which dipped 1.4% year over year. 

Funds from operations increased 7.3% year over year to $15.3 million.

ENSG’s Financial Update (as of Dec. 31, 2024)

Ensign Group exited the fourth quarter with cash and cash equivalents of $464.6 million, which declined 8.8% from the 2023-end figure. It had a leftover capacity of $572.1 million under its line of credit at the fourth-quarter end.

Total assets of $4.7 billion increased 11.8% from the level at 2023-end.

Long-term debt-less current maturities were $141.6 million, down 2.7% from the figure as of Dec. 31, 2023. Current maturities of long-term debt amounted to $4.1 million.

Total equity of $1.8 billion advanced 22.9% from the 2023-end figure.

ENSG generated net cash from operations of $347.2 million in 2024, which fell 7.8% from the 2023 figure.

Ensign Group’s Capital-Deployment Update

Ensign Group did not buy back shares in 2024. In the same time frame, management paid dividends worth $13.7 million.

ENSG’s 2025 Outlook Unveiled

Revenues are forecasted to lie within $4.83-$4.91 billion, the mid-point of which indicates an improvement of 14.3% from the 2024 figure of $4.26 billion.

Adjusted EPS is forecasted to be between $6.16 and $6.34, the midpoint of which implies 13.8% growth from the 2024 figure of $5.50.

The weighted average common shares outstanding is estimated to be around 59.5 million and the tax rate is assumed to be 25%.

ENSG’s Zacks Rank

Ensign Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Medical Sector Releases

Of the Medical sector players that have reported fourth-quarter 2024 results so far, the bottom-line results of Centene Corporation CNC, HCA Healthcare, Inc. HCA and Elevance Health, Inc. ELV beat the respective Zacks Consensus Estimate.

Centene reported fourth-quarter 2024 adjusted EPS of 80 cents, which outpaced the Zacks Consensus Estimate by 63.3%. Moreover, the bottom line rose 77.8% year over year. Revenues were $40.8 billion, which increased 3.4% year over year. The top line surpassed the consensus mark by 4.8%. Revenues from Medicaid dipped 1% year over year to $20.8 billion, while Medicare revenues grew 4% year over year to $5.5 billion. Additionally, commercial revenues of $8.7 billion climbed 18% year over year.

Centene's premiums amounted to $35.5 billion, rising 3.8% year over year. Service revenues decreased 29.7% year over year to $777 million. As of Dec. 31, 2024, total membership was 28.6 million, which grew 4.1% year over year. Centene’s HBR deteriorated 10 basis points year over year to 89.6%. Adjusted net earnings of $404 million rose 68.3% year over year.  Adjusted SG&A expense ratio of 8.9% improved 80 basis points year over year. 

HCA Healthcare’s fourth-quarter 2024 adjusted EPS of $6.22 outpaced the Zacks Consensus Estimate by 4.2%. The bottom line advanced 5.4% year over year. Revenues rose 5.7% year over year to $18.3 billion. The top line beat the consensus mark by 1.1% Same-facility equivalent admissions improved 3.1% year over year in the fourth quarter while same-facility admissions advanced 3% year over year. 

Same-facility revenue per equivalent admission grew 2.9% year over year.  Same-facility inpatient surgeries increased 2.8% year over year. Same-facility outpatient surgeries dipped 1.3% year over year. Additionally, same-facility emergency room visits rose 2.4% year over year in the fourth quarter.  Adjusted EBITDA of $3.7 billion improved 2.6% year over year. HCA Healthcare operated 190 hospitals and roughly 2,400 ambulatory sites of care across 20 states and the United Kingdom as of Dec. 31, 2024.

Elevance Health reported fourth-quarter 2024 adjusted EPS of $3.84, which surpassed the Zacks Consensus Estimate by 1.1%. However, the bottom line deteriorated 31.7% year over year. Operating revenues of $45 billion rose 6% year over year. Moreover, the top line beat the consensus mark by a whisker. Medical membership of Elevance Health was around 45.7 million as of Dec. 31, 2024, which slipped 2% year over year. 

Premiums increased 3.2% year over year to $36.2 billion. Product revenues of $6.7 billion increased 24.5% year over year. In the Health Benefits segment, operating revenues totaled $37.6 billion, which increased 3% year over year. Operating gain declined 75% year over year to $0.2 billion. The Carelon segment’s operating revenues amounted to $14.7 billion, which rose 19% year over year. The unit’s operating gain of $0.6 billion remained stable year over year. 

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