Disclosed in a recent SEC filing on April 30, Darby, EVP at Encompass Health EHC, made a noteworthy transaction involving the exercise of company stock options.
What Happened: Disclosed in a Form 4 filing on Wednesday with the U.S. Securities and Exchange Commission, Darby, EVP at Encompass Health, executed a strategic derivative sale. This involved exercising stock options for 10,000 shares of EHC, resulting in a transaction value of $824,400.
Encompass Health shares are trading, exhibiting up of 0.44% and priced at $117.5 during Thursday’s morning. This values Darby’s 10,000 shares at $824,400.
Get to Know Encompass Health Better
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’s Financial Performance
Revenue Growth: Over the 3 months period, Encompass Health showcased positive performance, achieving a revenue growth rate of 3.59% as of 31 March, 2025. This reflects a substantial increase in the company’s top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Health Care sector.
Holistic Profitability Examination:
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Gross Margin: The company issues a cost efficiency warning with a low gross margin of 43.35%, indicating potential difficulties in maintaining profitability compared to its peers.
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Earnings per Share (EPS): Encompass Health’s EPS outshines the industry average, indicating a strong bottom-line trend with a current EPS of 1.5.
Debt Management: Encompass Health’s debt-to-equity ratio is below the industry average. With a ratio of 1.25, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.
Evaluating Valuation:
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Price to Earnings (P/E) Ratio: A higher-than-average P/E ratio of 24.07 suggests caution, as the stock may be overvalued in the eyes of investors.
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Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 2.17 suggests overvaluation in the eyes of investors, considering sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an EV/EBITDA ratio of 11.51, the company’s market valuation exceeds industry averages.
Market Capitalization Analysis: With an elevated market capitalization, the company stands out above industry averages, showcasing substantial size and market acknowledgment.
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Illuminating the Importance of Insider Transactions
Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it’s crucial to evaluate them in conjunction with other investment factors.
When discussing 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 stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.
A new purchase by a company insider is a indication that they anticipate the stock will rise.
On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.
Cracking Transaction Codes
When dissecting transactions, the focal point for investors is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates 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.
