Encompass Health has added eight inpatient rehabilitation hospitals in the past 12 months, bringing its total to 149 facilities across 36 states. This growth includes three new openings in Texas, two in Florida and one each in Arizona, Ohio and North Carolina. The company’s average bed count per facility has risen by 5%, enhancing its ability to serve a broader patient base and capture referral volume from acute-care partners.

In the most recent quarter, Encompass Health generated $360 million in operating cash flow, up 12% year-over-year. Total rehabilitation admissions increased by 8.4%, driven by a near-20% surge in neurological cases and a 6% gain in orthopedic referrals. Management reports average daily census climbed to 85% of capacity compared with 79% a year earlier, supporting stronger free cash flow and debt reduction initiatives.

Zacks upgraded Encompass Health to a Rank #2 (Buy) status, citing growing optimism around earnings prospects. Consensus EBITDA forecasts have been revised upward by 4% for the full year, reflecting expectations of margin expansion through improved facility efficiencies. The company’s guidance now targets adjusted EPS in a range of $3.50 to $3.70, compared with prior estimates of $3.30 to $3.60, underscoring confidence in sustained operational momentum.

Encompass Health is piloting a tele-rehabilitation program in 12 markets, aiming to boost outpatient volumes by 15% within two years. The rollout follows successful trials that delivered a 10% improvement in patient functional outcomes and a 7% reduction in average length of stay. Additionally, a recent partnership with two major health systems is expected to funnel an incremental 4,000 patients annually into Encompass facilities.