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Investing.com - Stephens raised its price target on The Ensign Group Inc. (NASDAQ:ENSG) to $170.00 from $165.00 on Monday, while maintaining an Overweight rating on the skilled nursing facility operator. The company, currently valued at $8.6 billion, is trading near its 52-week high of $158.45, with InvestingPro data showing three analysts recently revising their earnings estimates upward.
The research firm cited Ensign’s strong fundamentals, noting the company achieved over 20% EBITDA growth in the first half of 2025, driven by expanding total facility occupancy and improved skilled mix despite uncertainty in the long-term Medicaid reimbursement environment for skilled nursing facilities. This growth is reflected in the company’s impressive EBITDA of $490.19 million and robust revenue growth of 16.31% over the last twelve months.
Stephens highlighted Ensign’s limited direct exposure to the Omnibus Budget Reconciliation Act (OBBBA), as skilled nursing facilities are exempt from decreasing provider tax thresholds and should remain "essentially neutral-to-positive" under Medicare rate benchmarks for Medicaid SDPs.
The company indicated during its earnings call that it expects sustained merger and acquisition activity for the remainder of the year, with a portfolio-sized deal to be announced imminently, according to Stephens. This M&A pipeline is reportedly unaffected by healthcare policy changes.
Stephens noted that Ensign’s acquisition opportunities have historically been "insulated from dramatic swings as one regulatory overhang gives way to another," citing the transition from SNF Minimum Staffing concerns to OBBBA as an example. With a strong financial health score of 2.96 (rated "GOOD" by InvestingPro), the company appears well-positioned to execute its M&A strategy. For deeper insights into Ensign’s acquisition potential and comprehensive financial analysis, investors can access the detailed Pro Research Report, available exclusively on InvestingPro.
In other recent news, The Ensign Group reported second-quarter earnings that surpassed analyst expectations, highlighting the company’s strong performance. The company announced adjusted earnings of $1.59 per share, which exceeded the analyst estimate of $1.55. Revenue for the quarter reached $1.23 billion, slightly above the consensus estimate of $1.22 billion, marking an 18.5% increase from the previous year. Additionally, Ensign Group raised its guidance for 2025, indicating confidence in its future performance. These developments reflect improved occupancy rates and skilled services revenue for the company. Investors may find these results encouraging as they consider the company’s growth trajectory.
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