Encompass Health Corp (EHC) is fairly valued and PACS Group Inc (PACS) is slightly overvalued.
Against our estimates of intrinsic value, EHC trades at the wider discount: a margin of safety of +3%, against -18% for PACS.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 8.3% (average of 3 methods) values the shares at $126.92; the price of $122.76 is 3% below that value, and 78% of that value comes from beyond year five.
Leak Score 59/100 on 3 of 12 signals
Discounting its cash flows at 11.7% (average of 3 methods) values the shares at $35.24; the price of $41.53 is 18% above that value, and 69% of that value comes from beyond year five.
Leak Score 14/100 on 3 of 12 signals
| Metric | EHC | PACS |
|---|---|---|
| Verdict | Fairly valued | Slightly overvalued |
| Price | $122.76 | $41.53 |
| Intrinsic value | $126.92 | $35.24 |
| Margin of safety | +3% | -18% |
| Leak Score | 59/100 (3/12) | 14/100 (3/12) |
| Market cap | $12.1B | $6.6B |
| Revenue growth, 5 years | 5.0% | 45.9% |
| Operating margin | 18.0% | 7.4% |
| Net margin | 10.0% | 4.8% |
| Return on equity | 24.8% | 28.1% |
| Debt to equity | 1.09 | 3.07 |
| P/E | 20.0x | 24.9x |
| Forward P/E | 18.4x | 15.9x |
| P/B | 4.7x | 5.9x |
| Dividend yield | 0.5% | — |