Is Encompass Health Corp. overvalued or undervalued?

As of 29 July 2025, the valuation grade for Encompass Health Corp. has moved from expensive to attractive, indicating a shift in market perception. The company is currently considered undervalued, supported by a P/E ratio of 21, an EV to EBITDA of 13.02, and a PEG ratio of 0.71, which suggests that the stock is priced favorably relative to its growth potential.
In comparison to peers, Encompass Health Corp. has a lower P/E ratio than The Ensign Group, Inc., which stands at 32.46, and a more favorable PEG ratio than DaVita, Inc., which has a PEG of 1.92. Notably, the company's recent stock performance has outpaced the S&P 500, with a year-to-date return of 35.71% compared to the index's 12.22%, reinforcing its attractive valuation.