Encompass Health Corp (EHC) is fairly valued and Tenet Healthcare Corp (THC) is undervalued.
Against our estimates of intrinsic value, THC trades at the wider discount: a margin of safety of +50%, against +3% for EHC.
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 8.8% (average of 3 methods) values the shares at $527.39; the price of $262.06 is 50% below that value, and 76% of that value comes from beyond year five.
Leak Score 85/100 on 10 of 12 signals
| Metric | EHC | THC |
|---|---|---|
| Verdict | Fairly valued | Undervalued |
| Price | $122.76 | $262.06 |
| Intrinsic value | $126.92 | $527.39 |
| Margin of safety | +3% | +50% |
| Leak Score | 59/100 (3/12) | 85/100 (10/12) |
| Market cap | $12.1B | $21.1B |
| Revenue growth, 5 years | 5.0% | 3.9% |
| Operating margin | 18.0% | 16.5% |
| Net margin | 10.0% | 10.3% |
| Return on equity | 24.8% | 53.3% |
| Debt to equity | 1.09 | 2.84 |
| P/E | 20.0x | 10.1x |
| Forward P/E | 18.4x | 12.4x |
| P/B | 4.7x | 4.5x |
| Dividend yield | 0.5% | — |