Since April 2021, the S&P 500 has delivered a total return of 61.3%. But one standout stock has nearly doubled the market - over the past five years, The Ensign Group has surged 115% to $197.91 per share. Its momentum hasn’t stopped as it’s also gained 12.1% in the last six months, beating the S&P by 14.1%.
Following the strength, is ENSG a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.
Why Does ENSG Stock Spark Debate?
Founded in 1999 and named after a naval term for a flag-bearing ship, The Ensign Group (NASDAQ: ENSG) operates skilled nursing facilities, senior living communities, and rehabilitation services across 15 states, primarily serving high-acuity patients recovering from various medical conditions.
Two Things to Like:
1. Projected Revenue Growth Is Remarkable
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.
Over the next 12 months, sell-side analysts expect The Ensign Group’s revenue to rise by 18.3%, close to its 17% annualized growth for the past five years. This projection is admirable and suggests the market is forecasting success for its products and services.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
The Ensign Group’s EPS grew at a spectacular 13.8% compounded annual growth rate over the last five years. This performance was better than most healthcare businesses.
One Reason to be Careful:
New Investments Fail to Bear Fruit as ROIC Declines
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, The Ensign Group’s ROIC has decreased significantly over the last few years. Only time will tell if its new bets can bear fruit and potentially reverse the trend.
Final Judgment
The Ensign Group has huge potential even though it has some open questions, and with its shares beating the market recently, the stock trades at 26.2× forward P/E (or $197.91 per share). Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More Than The Ensign Group
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
