President & CEO At Encompass Health Exercises Options Worth $9.66M

Disclosed in a recent SEC filing on May 20, Tarr, President & CEO at Encompass Health EHC, made a noteworthy transaction involving the exercise of company stock options.

What Happened: Disclosed in a Form 4 filing on Tuesday with the U.S. Securities and Exchange Commission, Tarr, President & CEO at Encompass Health, executed a strategic derivative sale. This involved exercising stock options for 118,384 shares of EHC, resulting in a transaction value of $9,663,771.

Currently, Encompass Health shares are trading down 0.0%, priced at $121.73 during Wednesday's morning. This values Tarr's 118,384 shares at $9,663,771.

Get to Know Encompass Health Better

Encompass Health Corp provides post-acute healthcare services in the United States through a network of inpatient rehabilitation hospitals. Inpatient rehabilitation contributes the majority of the firm's revenue and provides specialized rehabilitative treatment through a network of inpatient hospitals. These hospitals are concentrated in the eastern half of the United States and Texas.

Financial Insights: Encompass Health

Revenue Growth: Over the 3 months period, Encompass Health showcased positive performance, achieving a revenue growth rate of 10.59% as of 31 March, 2025. This reflects a substantial increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Health Care sector.

Analyzing Profitability Metrics:

• Gross Margin: The company issues a cost efficiency warning with a low gross margin of 43.35%, indicating potential difficulties in maintaining profitability compared to its peers.

• Earnings per Share (EPS): Encompass Health's EPS is a standout, portraying a positive bottom-line trend that exceeds the industry average with a current EPS of 1.5.

Debt Management: Encompass Health's debt-to-equity ratio is below the industry average at 1.25, reflecting a lower dependency on debt financing and a more conservative financial approach.

Valuation Metrics: A Closer Look

• Price to Earnings (P/E) Ratio: Encompass Health's current Price to Earnings (P/E) ratio of 25.05 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.

• Price to Sales (P/S) Ratio: With a relatively high Price to Sales ratio of 2.26 as compared to the industry average, the stock might be considered overvalued based on sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an impressive EV/EBITDA ratio of 11.88, Encompass Health demonstrates exemplary market valuation, surpassing industry averages.

Market Capitalization Analysis: With an elevated market capitalization, the company stands out above industry averages, showcasing substantial size and market acknowledgment.

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Illuminating the Importance of Insider Transactions

Insider transactions should be considered alongside other factors when making investment decisions, as they can offer important insights.

In legal terms, an "insider" refers to any officer, director, or beneficial owner of more than ten percent of a company's equity securities registered under Section 12 of the Securities Exchange Act of 1934. This can include executives in the c-suite and large hedge funds. These insiders are required to let the public know of their transactions via a Form 4 filing, which must be filed within two business days of the transaction.

When a company insider makes a new purchase, that is an indication that they expect the stock to rise.

Insider sells, on the other hand, can be made for a variety of reasons, and may not necessarily mean that the seller thinks the stock will go down.

Deciphering Transaction Codes in Insider Filings

Delving into transactions, investors typically prioritize those unfolding in the open market, as precisely outlined in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S signifies a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of Encompass Health's Insider Trades.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.