ENSIGN GROUP, INC (ENSG): what the price assumes

In the published model solve dated 2026-Q2, anchored at $170.79, ENSIGN GROUP, INC (ENSG) is priced for +7.3% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/ENSG

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 8: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7.1% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.6%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Growth here is bought one building at a time and then improved: the 10-K reports that "During the year ended December 31, 2025, we added 46 new operations.", and consolidated revenue rose 18.7% to $5,057.8 million for the year.
• Governments set most of the prices, with Medicaid at 59.0% of skilled nursing patient days and Medicare at roughly a quarter of skilled services revenue.
• The next markers are occupancy and acquisition pace, both of which the company put numbers on in April: record Same Facilities occupancy of 84.3% and 22 new operations added during the first quarter and since.

Bull Case

Every method that measures what this company earns right now says the price is too high. Only the methods that project cash years forward reach it. Read plainly, that is the market saying it is not paying for last year's profit; it is paying for a machine that has been converting bad buildings into good ones for two decades and is expected to keep doing it. The whole bull case rests on whether that machine is real, so the useful thing to do is look at what it produced.

In 2025 it produced 46 new operations, which the 10-K states directly: "During the year ended December 31, 2025, we added 46 new operations." Consolidated revenue rose 18.7% to $5,057.8 million, with the Skilled Services segment reaching $4,837.8 million from $4,076.8 million a year earlier. That is not a company nudging up prices in a stable footprint. It is a company that has industrialized the acquisition and turnaround of skilled nursing facilities, which is a genuinely hard thing to do because the asset being improved is a workforce and a clinical reputation rather than a piece of equipment.

The clinical evidence is the part most valuation frameworks cannot see at all, and it is the actual moat. Management reported that on the most recently published federal data, same-store Ensign-affiliated facilities outperformed peers in annual survey results by 22% at the state level and 31% at the county level, and outperformed on five-star quality measures by 24% nationally, noting that many of these buildings carried one- or two-star ratings when acquired. Quality ratings are not vanity in this industry. They determine which hospitals send discharges, which is what fills beds, which is what pays for everything else. Occupancy at Same Facilities and Transitioning Facilities hit record levels of 84.3% and 85.1% in the first quarter of 2026.

The second engine is the property company built inside the operating company. The 10-K notes that "Standard Bearer elected to be taxed as a REIT, for U.S. federal income tax purposes, commencing with its taxable year ended December 31, 2022.", and describes the arrangement as one where "The Company's rental revenues are primarily generated by leasing healthcare-related properties through triple-net lease arrangements, under which the tenant is solely responsible for the costs related to the property." Owning the real estate under a growing share of its own operations means the company captures the property yield as well as the operating spread, and it gives the acquisition team a second way to structure a deal when a seller wants to keep or shed the building.

Then there is the capacity to keep going. On a funded-borrowings basis the company runs a net cash position of about 450.8 million dollars, and it reported roughly 539.5 million dollars on hand plus 591.6 million dollars of undrawn credit capacity at the end of the first quarter. Operating profit covers the interest bill more than fifty times over. What the price is asking for is roughly ten percent annual growth in operating profit over five years, which is well under the pace this company has averaged. An acquirer with no financing constraint, in a fragmented industry where nonprofits and struggling operators are exiting, does not need heroics to clear that.

Bear Case

The buyers on the other side of the table have gotten better, and two different kinds of competitor are squeezing from opposite directions. PACS grew revenue about 22.2% over its trailing year while running a 7.0% operating margin, which makes it a direct and hungry bidder for the same facilities Ensign wants. Meanwhile the businesses that keep patients out of facilities altogether are growing at least as fast and earning more per dollar: AVAH expanded about 20.5% at a 10.9% operating margin and ADUS about 19.6% at 9.8%, both above the roughly eight percent this company earns. A roll-up's returns fade when the price of the next acquisition rises, and competitive bidding is exactly how that happens. The clinical turnaround skill is real; it does not set the purchase price.

Underneath the competition sits a pricing structure the company does not control. Medicaid accounted for 59.0% of skilled nursing patient days in 2025, and roughly 46.6% of skilled services revenue came from Medicaid with another 24.7% from Medicare. Seven dollars in ten are set by state and federal budgets rather than by negotiation. How quickly that can move was demonstrated in the other direction recently: the federal minimum staffing rule finalized in April 2024 was repealed on December 2, 2025. A rule that could have imposed material cost went away by administrative decision. The same mechanism can add cost, or trim rates, on the same timetable.

The balance sheet is more complicated than the headline suggests, and the difference matters. Measured on funded borrowings alone, the company holds net cash of roughly 450.8 million dollars. Measured with the capitalized obligations on the facilities it leases rather than owns, the same balance sheet carries about 1.7 billion dollars of net obligations. Both figures are correct on their own basis, and the second one is the one that behaves like debt during a bad year, because rent on a leased skilled nursing facility does not fall when occupancy does. This is the structural fragility a roll-up of leased operations carries and an owner of buildings does not.

Which brings the argument to what the price actually requires. Today's level works out to roughly 28 times operating profit and embeds that profit growing about 10% a year for five years. The growth delivered so far has come with a specific fingerprint: revenue rose 18.7% in 2025 while 46 operations were added, and cost of services stayed at 79.5% of revenue against 79.3% the year before. In other words the margin did not improve; the base got bigger. That is a perfectly good way to run a business, but it means the priced-in growth is a bet on deal flow continuing at the same returns rather than on the existing estate becoming more profitable. Roughly 57% of companies growing at such a pace held it for five years, which is better than a coin flip and a long way from a certainty.

The capital return picture reinforces where the money is expected to go. The board authorized a $40 million repurchase program in May 2026 and raised it to $100 million in June. Against a market value above ten billion dollars, that is a rounding error rather than a return of capital, and the share count has drifted up at about 1.2% a year over the past four years. Shareholders here are funding growth, not receiving it.

Valuation

Ten percent a year, for five years. That is what today's price asks of operating profit, and it works out to paying roughly 28 times the current figure. Set against this company's own record the demand is not aggressive; the pace it has averaged over its recent history is meaningfully higher than what the price requires. Set against the base rate for companies generally, it is a real but unremarkable ask: roughly 57% of comparable fast growers held such a pace across five years. The unusual feature of this stock is not the growth requirement. It is how completely the methods disagree about whether that requirement is worth paying for.

Book-value approaches, earnings-power approaches and peer multiples all land below today's price, several of them at a fraction of it. The cash-flow approaches are the only ones that get there. That configuration has a plain reading: the market is paying a premium for durability, for a business it expects to keep compounding in a way that a snapshot of current earnings structurally cannot capture. It is a legitimate thing to pay for, and it is also the entire risk, because a durability premium is the first thing to disappear when the compounding stutters.

The peer group sharpens rather than settles it. On operating margin the company sits around eight percent, above SEM at 5.8% and PACS at 7.0%, below AVAH at 10.9% and ADUS at 9.8%. It is not the most profitable operator in its neighbourhood. What distinguishes it is the rate at which it adds operations and the clinical results it produces inside them, and neither of those is a margin.

The balance sheet needs two readings, and both belong in the analysis. Counting only funded borrowings, the company holds net cash of about 450.8 million dollars against liquid assets near 595.2 million, with operating profit covering the interest bill more than fifty times over. Counting the capitalized obligations on leased facilities alongside the borrowings, the position becomes roughly 1.7 billion dollars of net obligations. The first number is why the acquisition engine never has to stop. The second is what the estate actually owes each year regardless of how full the beds are. A buyer at $172.88 is underwriting both at once: an acquirer with real firepower, and an operator whose fixed rent obligations arrive on schedule whether or not the next 46 buildings turn around on time.

Catalysts

First-quarter results, reported April 30, 2026, came with raised guidance rather than the reverse. Consolidated revenue reached $1.39 billion, up 18.4% year on year, with Skilled Services revenue of $1.33 billion, also up 18.4%. Reported diluted earnings per share came to $1.67, up 21.9%, on net income of $99.7 million. Occupancy at Same Facilities and Transitioning Facilities reached what the company described as record highs of 84.3% and 85.1%, and the smaller property segment reported revenue of $36.1 million, up 27.1%, with funds from operations of $21.6 million.

On the back of that quarter and the deals announced alongside it, management raised full-year 2026 guidance to $7.48 to $7.62 of diluted earnings per share from an original $7.41 to $7.61, and full-year 2026 revenue to $5.81 billion to $5.86 billion from $5.77 billion to $5.84 billion, assuming about 60.0 million diluted shares and a 25.0% tax rate. The acquisition pace behind those figures is the number to track: 22 new operations were added during the quarter and since, including 21 real estate assets, bringing the count acquired during 2025 and after to 71. Management described a pipeline that includes larger portfolios, landlords looking to replace tenants, and nonprofits divesting post-acute assets, with further additions expected in the second and third quarters of 2026.

Two governance items round out the period. The board approved a $40 million share repurchase program on May 13, 2026, then increased it by $60 million on June 12, 2026, taking total authorized capacity to $100 million. Separately, and further back but still shaping the cost outlook, the federal minimum staffing standard for skilled nursing facilities that had been finalized in April 2024 was repealed on December 2, 2025, removing a labour cost mandate the whole industry had been planning around.

Peer Cohorts (Per Segment, With Filing Citations)

Skilled Services (reported)

• PACS (PACS Group, Inc.)
• FY2025 10-K: …in the payor mix can significantly affect our revenue and profitability. To monitor this performance, we evaluate two different measures of skilled mix: ◦ Skilled mix by revenue - Skilled mix by revenue represents the portion of routine revenue generated from treating high acuity Medicare and managed care patients.…
• FY2025 10-K: …care, assisted living, and independent living options in some of our communities. As of December 31, 2025, our portfolio consisted of 321 post-acute care, assisted living, and independent living facilities across 17 states serving over 31,700 patients daily. We believe our significant historical growth has been…
• NHC (NATIONAL HEALTHCARE CORP)
• FY2025 10-K: …competitive with other market rates. ● Medical Specialty Units. All our skilled nursing facilities participate in the Medicare program, and we have expanded our range of offerings by the creation of facility-specific medical specialty units such as our memory care units and sub-acute nursing units. Our trained staff…
• FY2025 10-K: …non-operating income from equity in earnings of unconsolidated investments, dividends and realized gains and losses on marketable securities, interest income, and other miscellaneous non-operating income. 4 Quality of Patient Care The Centers for Medicare and Medicaid Services ("CMS") introduced the Five-Star Quality…
• SEM (SELECT MEDICAL HOLDINGS CORP)
• FY2025 10-K: 13 weeks, prior to assuming patient care responsibilities. We have also developed several programs to advance technical and clinical skills, enable career growth and improve retention for clinical and operational employees. Using our online learning platform, we have developed an extensive catalog of online learning…
• FY2025 10-K: …sem:RehabilitationHospitalsMember 2023-01-01 2023-12-31 0001320414 us-gaap:OperatingSegmentsMember sem:HealthCarePatientServiceNonMedicareMember sem:OutpatientRehabilitationMember 2023-01-01 2023-12-31 0001320414 us-gaap:CorporateNonSegmentMember sem:HealthCarePatientServiceNonMedicareMember 2023-01-01 2023-12-31…
• ADUS (Addus HomeCare Corp)
• FY2025 10-K: …who require long-term care and assistance with activities of daily living to maintain their independence at home with their families. Personal care services are a significant component of home and community-based services ("HCBS"), which have grown in significance and demand in recent years. In particular, the demand…
• FY2025 10-K: …than the provision of similar services in institutional settings for long-term care. We plan to continue our revenue growth and enhance our competitive positioning by executing on the following growth strategies: 6 Table of Contents Consistently Provide High-Quality Care We schedule and require our caregivers to…
• AVAH (Aveanna Healthcare Holdings Inc.)
• FY2025 10-K: …affords us the distinct ability to improve outcomes and control costs. However, many of our highest acuity patients remain on our services for ten or more years. Our PDN services typically last four to 24 hours a day. Our services are provided by our nursing staff up to 24 hours a day, seven days a week, with…
• FY2025 10-K: …wage, this has not historically been a source of risk to our margins, as our non-clinical reimbursement rates generally have mechanisms to adjust commensurate with state and local changes in applicable minimum wages. Pediatric Therapy We provide physical, occupational and speech therapy services to assist pediatric…
• BTSG (BrightSpring Health Services, Inc.)
• FY2025 10-K: …supported for patients outside of retail pharmacies. The Company's footprint of pharmacies covers all 50 states with a localized model that features "white-glove" and customized programs and allows for faster response times and a better customer and patient experience. We service customer locations typically multiple…
• FY2025 10-K: ConcentrationRiskMember btsg:CommercialInsuranceMember 2024-01-01 2024-12-31 0001865782 btsg:ProviderServicesMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember btsg:MedicareBMember 2023-01-01 2023-12-31 0001865782 btsg:FirstLienCreditAgreementMember 2019-03-05 0001865782…
• BKD (BROOKDALE SENIOR LIVING INC.)
• FY2025 10-K: …areas of compensation, leadership, career growth, and meaningful work. • Earn resident and family trust and satisfaction by providing valued, high-quality care and personalized service. We believe that fostering the continued trust of our residents and their families will allow us to build relationships that create…
• FY2025 10-K: …the growth and increasing demand in the industry. Some of our most significant competitive strengths are: • Skilled management team with extensive experience . Our senior management team has extensive experience in the senior living industry, including operating and managing a broad range of senior living assets, and…

Standard Bearer (reported)

• OHI (OMEGA HEALTHCARE INVESTORS, INC.)
• FY2025 10-K: …named therein and U.S. Bank National Association, governing the Company's 4.500% Senior Notes due 2027 (Incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, filed March 24, 2015). 4.1A First Supplemental Indenture, dated as of April 1, 2015, among the Company, each of the subsidiary…
• FY2025 10-K: MaplewoodRealEstateHoldingsMember ohi:RevolvingCreditFacilityReceivableMember 2023-01-01 2023-03-31 0000888491 ohi:MaplewoodRealEstateHoldingsMember ohi:RevolvingCreditFacilityReceivableMember 2022-12-31 2022-12-31 0000888491 srt:WeightedAverageMember ohi:NineteenNewRealEstateLoansMember 2025-01-01 2025-12-31…
• LTC (LTC PROPERTIES INC)
• FY2025 10-K: 00887905 2025-01-01 2025-12-31 ltc:borrower ltc:loan ltc:Option ltc:Center ltc:state iso4217:USD ltc:item ltc:segment xbrli:shares iso4217:USD xbrli:pure ltc:property ltc:item iso4217:USD xbrli:shares ltc:period ltc:lease ltc:community Table of Contents ​ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,…
• FY2025 10-K: …2025-01-01 2025-12-31 0000887905 stpr:MO ltc:ParcelOfLandMember 2024-01-01 2024-12-31 0000887905 stpr:MI ltc:SkilledNursingFacilityBeds15Member 2024-01-01 2024-12-31 0000887905 stpr:LA ltc:SkilledNursingFacilityBeds189Member 2024-01-01 2024-12-31 0000887905 stpr:GA…
• SBRA (SABRA HEALTH CARE REIT, INC.)
• FY2025 10-K: …2025-01-01 2025-12-31 0001492298 us-gaap:RestrictedStockUnitsRSUMember 2024-01-01 2024-12-31 0001492298 us-gaap:RestrictedStockUnitsRSUMember 2023-01-01 2023-12-31 0001492298 sbra:ForwardEquitySaleAgreementSharesMember 2025-01-01 2025-12-31 0001492298 sbra:ForwardEquitySaleAgreementSharesMember 2024-01-01 2024-12-31…
• FY2025 10-K: …2025-12-31 0001492298 sbra:SkilledNursingTransitionalCareFacilitiesMember sbra:SeattleWA1Member 2025-12-31 0001492298 sbra:SkilledNursingTransitionalCareFacilitiesMember sbra:HuntingtonBeachCAMember 2025-12-31 0001492298 sbra:SkilledNursingTransitionalCareFacilitiesMember sbra:ChatsworthCAMember 2025-12-31 0001492298…
• NHI (National Health Investors, Inc.)
• FY2025 10-K: …31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based…
• FY2025 10-K: 79,500 9.34 Non-vested options forfeited ( 70,503 ) 8.86 Vested ( 444,503 ) 9.28 Non-vested options outstanding at the end of the year 405,188 8.95 Note 13. Earnings Per Share The following table presents the calculations of basic and diluted earnings per share ( $ in thousands, except per share amounts ): Year Ended…
• MPT (MEDICAL PROPERTIES TRUST, INC.)
• FY2025 10-K: …mpt:RoelandParkKansasMember 2025-12-31 0001287865 us-gaap:SalesRevenueNetMember us-gaap:GeographicConcentrationRiskMember country:US 2024-01-01 2024-12-31 0001287865 us-gaap:FairValueInputsLevel3Member mpt:StewardHealthCareSystemLLCMember us-gaap:IncomeApproachValuationTechniqueMember srt:MaximumMember 2024-01-01…
• FY2025 10-K: InputsLevel3Member mpt:StewardHealthCareSystemLLCMember srt:MinimumMember us-gaap:IncomeApproachValuationTechniqueMember 2024-01-01 2024-12-31 0001287865 mpt:NineteenTwentyTwoMember mpt:LewistonIDMember 2025-12-31 0001287865 mpt:RosenbergTexasMember mpt:TwoThousandSixteenMember 2025-12-31 0001287865…
• DOC (Healthpeak Properties, Inc.)
• FY2025 10-K: …peak:CO0728AuroraCOMember peak:OutpatientMedicalMember 2025-12-31 0000765880 us-gaap:OperatingSegmentsMember peak:CO1196AuroraCOMember peak:OutpatientMedicalMember 2025-12-31 0000765880 us-gaap:OperatingSegmentsMember peak:CO1197AuroraCOMember peak:OutpatientMedicalMember 2025-12-31 0000765880…
• FY2025 10-K: 5609SanDiegoCAMember peak:LabMember 2025-12-31 0000765880 us-gaap:OperatingSegmentsMember peak:CA5610SanDiegoCAMember peak:LabMember 2025-12-31 0000765880 us-gaap:OperatingSegmentsMember peak:CA5616SanDiegoCAMember peak:LabMember 2025-12-31 0000765880 us-gaap:OperatingSegmentsMember peak:CA5617SanDiegoCAMember…
• WELL (WELLTOWER INC.)
• FY2025 10-K: …currency translation adjustments in accumulated other comprehensive income, a component of stockholders' equity, on our Consolidated Balance Sheets. Earnings Per Share Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding for…
• FY2025 10-K: 01-01 2025-12-31 0000766704 well:UnitedStatesAZGAKSNCNJNVNYTXMember well:FirstMortgagesLessThanThreePercentOfTotalMember well:VariousSegmentsMember 2025-12-31 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT…
• VTR (Ventas, Inc.)
• FY2025 10-K: NetOperatingIncomeBenchmarkMember 2024-01-01 2024-12-31 0000740260 vtr:BrookdaleSeniorLivingMember us-gaap:CustomerConcentrationRiskMember vtr:NetOperatingIncomeBenchmarkMember 2023-01-01 2023-12-31 0000740260 vtr:ArdentMember us-gaap:CustomerConcentrationRiskMember vtr:NetOperatingIncomeBenchmarkMember 2025-01-01…
• FY2025 10-K: 24-01-01 2024-12-31 0000740260 us-gaap:GeneralAndAdministrativeExpenseMember vtr:RestrictedStockOrRestrictedStockUnitsMember 2023-01-01 2023-12-31 0000740260 vtr:RestrictedStockOrRestrictedStockUnitsMember srt:MaximumMember vtr:EmployeeMember 2025-01-01 2025-12-31 0000740260…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.