The Ensign Group’s third quarter results reflected strong operational execution, with revenue growth fueled by higher patient volumes and improved clinical outcomes. Management credited gains in occupancy and skilled patient mix as crucial drivers, highlighting the impact of their decentralized, locally led model. CEO Barry Port emphasized, “Our clinical performance continues to be the key differentiator for us,” noting that same-store facilities outperformed peers in government surveys and achieved record occupancy. The company also benefited from successful integration of new acquisitions, particularly in California and Utah, which contributed to expanding its footprint and service capabilities.
Is now the time to buy ENSG? Find out in our full research report (it’s free for active Edge members).
The Ensign Group (ENSG) Q3 CY2025 Highlights:
- Revenue: $1.30 billion vs analyst estimates of $1.28 billion (19.8% year-on-year growth, 1.3% beat)
- EPS (GAAP): $1.42 vs analyst expectations of $1.49 (4.9% miss)
- Adjusted EBITDA: $151.1 million vs analyst estimates of $147.1 million (11.7% margin, 2.7% beat)
- The company lifted its revenue guidance for the full year to $5.06 billion at the midpoint from $5.01 billion, a 1.1% increase
- EPS (GAAP) guidance for the full year is $6.51 at the midpoint, beating analyst estimates by 12.1%
- Operating Margin: 7.4%, in line with the same quarter last year
- Sales Volumes rose 15.1% year on year (9.9% in the same quarter last year)
- Market Capitalization: $10.35 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From The Ensign Group’s Q3 Earnings Call
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Benjamin Hendrix (RBC Capital Markets) asked about further potential for skilled mix growth in mature facilities. CEO Barry Port and COO Spencer Burton explained there is significant headroom, especially as only 31.7% of same-store days are currently skilled, and that organic growth remains a major focus.
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Hendrix (RBC Capital Markets) also inquired about managed care contracting in new markets such as Alabama. CFO Suzanne Snapper described it as a gradual process, requiring time to establish relationships and clinical readiness, but emphasized that long-term partnerships drive eventual gains.
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Albert Rice (UBS) questioned whether current deal activity was influenced by market conditions. Chief Investment Officer Chad Keetch clarified that acquisition timing was mostly due to seller readiness, and that discipline in pricing remains a priority despite some regions seeing elevated competition.
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Rice (UBS) sought updates on behavioral health service expansion. CEO Barry Port confirmed growing traction, with new behavior units being added in Arizona and California to address increased demand from managed care partners.
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Raj Kumar (Stephens) asked about market share gains and organic growth prospects. Port highlighted that, while demographic demand is the main driver, Ensign’s facilities are increasingly positioned as high-quality, lower-cost alternatives, enabling gradual share gains over time.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch for (1) further progress in increasing occupancy and skilled mix, (2) the pace and effectiveness of integrating newly acquired facilities, especially in new and existing regions, and (3) continued improvements in labor efficiency and cost management. Additional attention will be paid to reimbursement rate developments and the expansion of value-added services, such as behavioral health, which could impact long-term growth.
The Ensign Group currently trades at $183.56, in line with $184.08 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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