Is Encompass Health Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Encompass Health Corp. has moved from very expensive to attractive, indicating a significant improvement in its valuation outlook. The company appears to be undervalued, supported by a P/E ratio of 21, a PEG ratio of 0.71, and an EV to EBITDA ratio of 13.02. In comparison to peers, Encompass Health's P/E ratio is lower than The Ensign Group, Inc. at 32.46, but higher than DaVita, Inc. at 9.71, suggesting a competitive position within its industry.
The company's strong performance is further highlighted by a 34.87% year-to-date return compared to the S&P 500's 13.30%, and a remarkable 155.17% return over three years, significantly outpacing the benchmark's 81.19%. Overall, these metrics and comparisons reinforce the view that Encompass Health Corp. is currently undervalued in the market.