DCF Tool

EHC

Encompass Health Corp – General Medical and Surgical Hospitals
As a national leader in integrated healthcare services, Encompass Health offers both facility-based and home-based patient care through its network of inpatient rehabilitation hospitals, home health agencies and hospice agencies. With a national footprint that includes 137 hospitals, 241 home health locations, and 82 hospice locations in 39 states and Puerto Rico, the Company provides high-quality, cost-effective integrated healthcare. Encompass Health is ranked as one of Fortune's 100 Best Companies to Work For.
Analysis Results
Intrinsic Value $141.22
Latest Price $53.33
Relative Value 62% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 3.6%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 4.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 3.6%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 446 427
2023 462 425
2024 479 422
2025 496 419
2026 514 417
Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 15400 million. This corresponds to a present value of 12000 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 2110 million. Adding in the terminal value gives a total present value of 14100 million.

There are presently 99.8 million outstanding shares, so the intrinsic value per share is 141.22.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 921,400,000
Current Cash 54,800,000
Current Liabilities 748,800,000
Current Debt 42,800,000
Non-Cash Working Capital (NCWC) 160,600,000
Change in NCWC 115,000,000
EBIT 810,500,000
Tax Provision 139,600,000
Depreciation and Amortization 256,600,000
Capital Expenditure -551,200,000
Unlevered Free Cash Flow 458,736,579
Current Assets 948,600,000
Current Cash 224,000,000
Current Liabilities 717,300,000
Current Debt 38,300,000
Non-Cash Working Capital (NCWC) 45,600,000
Change in NCWC 66,300,000
EBIT 651,300,000
Tax Provision 103,800,000
Depreciation and Amortization 243,000,000
Capital Expenditure -408,200,000
Unlevered Free Cash Flow 409,351,036
Current Assets 755,800,000
Current Cash 94,800,000
Current Liabilities 721,000,000
Current Debt 39,300,000
Non-Cash Working Capital (NCWC) -20,700,000
Change in NCWC 23,100,000
EBIT 699,200,000
Tax Provision 115,900,000
Depreciation and Amortization 218,700,000
Capital Expenditure -404,100,000
Unlevered Free Cash Flow 392,782,482
Current Assets 662,100,000
Current Cash 69,200,000
Current Liabilities 672,500,000
Current Debt 35,800,000
Non-Cash Working Capital (NCWC) -43,800,000
Change in NCWC -206,400,000
EBIT 690,300,000
Tax Provision 118,900,000
Depreciation and Amortization 199,700,000
Capital Expenditure -270,500,000
Unlevered Free Cash Flow 246,683,394
Current Assets 702,200,000
Current Cash 54,400,000
Current Liabilities 517,500,000
Current Debt 32,300,000
Non-Cash Working Capital (NCWC) 162,600,000
Change in NCWC -12,900,000
EBIT 657,400,000
Tax Provision 160,600,000
Depreciation and Amortization 183,800,000
Capital Expenditure -245,000,000
Unlevered Free Cash Flow 370,611,764
Current Assets 654,500,000
Current Cash 40,500,000
Current Liabilities 475,600,000
Current Debt 37,100,000
Non-Cash Working Capital (NCWC) 175,500,000
Change in NCWC 28,000,000
EBIT 658,600,000
Tax Provision 163,900,000
Depreciation and Amortization 172,600,000
Capital Expenditure -202,900,000
Unlevered Free Cash Flow 432,348,672
Current Assets 598,700,000
Current Cash 61,600,000
Current Liabilities 426,400,000
Current Debt 36,800,000
Non-Cash Working Capital (NCWC) 147,500,000
Change in NCWC -128,900,000
EBIT 562,900,000
Tax Provision 141,900,000
Depreciation and Amortization 139,700,000
Capital Expenditure -156,500,000
Unlevered Free Cash Flow 215,290,217
Current Assets 686,600,000
Current Cash 66,700,000
Current Liabilities 364,300,000
Current Debt 20,800,000
Non-Cash Working Capital (NCWC) 276,400,000
Change in NCWC 59,800,000
EBIT 476,400,000
Tax Provision 110,700,000
Depreciation and Amortization 107,700,000
Capital Expenditure -187,900,000
Unlevered Free Cash Flow 319,692,220
Current Assets 580,400,000
Current Cash 64,500,000
Current Liabilities 311,600,000
Current Debt 12,300,000
Non-Cash Working Capital (NCWC) 216,600,000
Change in NCWC -100,000
EBIT 470,000,000
Tax Provision 12,700,000
Depreciation and Amortization 94,700,000
Capital Expenditure -216,500,000
Unlevered Free Cash Flow 332,996,255
Current Assets 636,800,000
Current Cash 132,800,000
Current Liabilities 300,900,000
Current Debt 13,600,000
Non-Cash Working Capital (NCWC) 216,700,000
Change in NCWC 150,100,000
EBIT 426,100,000
Tax Provision 108,600,000
Depreciation and Amortization 82,500,000
Capital Expenditure -159,700,000
Unlevered Free Cash Flow 362,898,647

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