The Ensign Group, Inc. (ENSG) Earnings & Analysis

Latest quarter

Ensign reported third-quarter revenue of $1.48 billion, up 14.5% from a year earlier but 0.71% below the consensus. Adjusted diluted earnings per share were $2.03, above the $1.94 consensus.

CEO Barry Port said same-store Medicare revenue rose 11.1% from the prior-year quarter, while managed-care revenue rose 9.1%. At transitioning facilities, he reported Medicare revenue growth of 7.8% and managed-care revenue growth of 7.2%.

Ensign’s diluted earnings per share rose to $1.76 from $1.42 a year earlier. Its gross margin increased to 16.9% from 14.7%, and operating margin increased to 9.30% from 7.42%. The company reported free cash flow of $192.6 million, compared with $101.8 million a year earlier. CFO Suzanne Snapper said Ensign ended September with $337.6 million in cash and cash equivalents.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Barry Port said Ensign’s affiliated facilities were caring for a larger share of Medicare, managed-care and other skilled patients. Same-store occupancy was 84.1% in the third quarter, while occupancy at transitioning facilities was 86.1%. He said skilled-mix revenue rose 10.7% at same-store facilities and 10.5% at transitioning facilities from a year earlier.

Port attributed the company’s approach to an integrated clinical model in which therapists work alongside nursing staff. He said the teams coordinate care around goals that include restoring function and reducing avoidable complications. Port also said administrator turnover was 45% below the CMS-measured state average and that leadership stability provided continuity for caregivers and residents.

On acquisitions, Port said Ensign had sourced, closed and transitioned 122 operations since 2024. CFO Suzanne Snapper said the company spent more than $675 million on its growth plan during the nine months ended September 30, 2026.

In response to a question about revenue projections and transitions, Port said the Texas buildings were not yet accretive but could contribute in the fourth quarter. He said the Florida facilities faced clinical, financial and physical-plant challenges, and that turnaround operations typically take a year or more to contribute to revenue and earnings. Port said clinical improvement would come first.

For the fourth quarter, Snapper said Ensign had built its historical seasonal pattern into guidance, alongside occupancy and skilled-mix growth. She said reimbursement changes, state-budget delays, staffing conditions, acquisition impacts and insurance accruals could affect quarterly performance.

Guidance

Ensign raised its FY2026 adjusted diluted earnings guidance to $7.94 to $8.02 per share from $7.75 to $7.85. Port said the company also raised the lower end of its annual revenue guidance to $5.89 billion while maintaining the upper end at $5.92 billion.

Snapper said the outlook includes acquisitions closed and expected to close through the fourth quarter, as well as management’s reimbursement-rate expectations. She said the primary exclusions were stock-based compensation and amortization of system implementation costs.