Is The Ensign Group, Inc. overvalued or undervalued?

As of 8 May 2025, the valuation grade for The Ensign Group, Inc. has moved from attractive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, with a P/E ratio of 30, which is higher than its peers such as Encompass Health Corp. at 20.99 and DaVita, Inc. at 10.06. Additionally, The Ensign Group's EV to EBITDA stands at 19.44, compared to Encompass Health's 12.80, further illustrating its premium valuation.
Key financial ratios reveal a Price to Book Value of 4.77 and a PEG ratio of 0.36, suggesting that while the company has strong growth potential, its current price may not justify the underlying value when compared to peers. The company's recent stock performance has outpaced the S&P 500, with a year-to-date return of 14.53% versus the index's 2.44%, but this does not mitigate the concerns regarding its elevated valuation metrics. Overall, The Ensign Group appears to be overvalued in the current market context.