Encompass HealthMEX:EHC 88 Operating Margin % is 19.01% as of Mar. 2026, which is 19% above its 10-year median of 16.02. GuruFocus rates MEX:EHC with a GF Score™ of 88/100 and a GF Value™ of MXN1,344.64. The stock has 1 warning sign investors should review. Among 666 Healthcare Providers & Services companies, Encompass Health ranks better than 87.99% on this metric.
Encompass Health Corp operating margin is expanding. Margin expansion is usually a good sign.
The historical rank and industry rank for Encompass Health's Operating Margin % or its related term are showing as below:
MEX:EHC'
s Operating Margin % Range Over the Past 10 Years
Min: 14.49 Med: 16.02 Max: 17.93
Current: 17.93
MEX:EHC's Operating Margin % is ranked better than 87.99% of 666
companies
in the Healthcare Providers & Services industry
Industry Median: 4.855
vs MEX:EHC: 17.93
Encompass Health's 5-Year Average Operating Margin % Growth Rate was 2.50% per year.
Encompass Health (MEX:EHC) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Encompass Health Operating Margin % Related Terms
Encompass Health Operating Margin % Historical Data
* Premium members only.
The historical data trend for Encompass Health's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
MEX:EHC vs ENSG, UHS, PACS: Operating Margin % Comparison
For the Medical Care Facilities subindustry, Encompass Health's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Encompass Health Operating Margin % vs Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, Encompass Health's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Encompass Health's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Encompass Health's Operating Margin % for the fiscal year that ended in Dec. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Encompass Health (MEX:EHC) has a Operating Margin % of 19.01% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Encompass Health and its competitors. This is 19% above median its historical median of 16.02. Over the past decade, Encompass Health's Operating Margin % has ranged from 14.49 to 17.93. According to the industry distribution chart, Encompass Health ranks #80 out of 666 companies in the Healthcare Providers & Services industry, placing it in the top 12%.
Is Encompass Health's Operating Margin % too high?
Encompass Health's current Operating Margin % of 19.01% is 19% above median its 10-year median of 16.02. Over the past 10 years, this metric has ranged from a low of 14.49 to a high of 17.93. The Healthcare Providers & Services industry median Operating Margin % is 4.86. Encompass Health's value of 19.01% is 291.6% above this industry median. Based on the distribution chart, Encompass Health ranks #80 out of 666 companies in the Healthcare Providers & Services industry, which is in the top quartile — a strong position relative to peers. Overall, Encompass Health has a GF Score™ of 88/100, reflecting its overall financial health beyond just this single metric.
How does Encompass Health's Operating Margin % compare to ENSG and UHS?
According to the Healthcare Providers & Services industry distribution chart, Encompass Health ranks #80 out of 666 companies for Operating Margin %. This places Encompass Health in the top 12% of its industry — outperforming the majority of peers. The industry median Operating Margin % is 4.86. Encompass Health's value of 19.01% is 291.6% above this benchmark. Historically, Encompass Health's own Operating Margin % has ranged from 14.49 to 17.93 over the past decade. While the company's 10-year median is 16.02 vs. the industry median of 4.86, Encompass Health has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Healthcare Providers & Services company?
The median Operating Margin % among Healthcare Providers & Services companies is 4.86, based on 666 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Encompass Health's current Operating Margin % of 19.01% is 291.6% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Encompass Health and its competitors. For the Healthcare Providers & Services industry, the median Operating Margin % is 4.86 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Encompass Health's current Operating Margin % is 19.01%, which is 19% above median its own 10-year median of 16.02. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Encompass Health stock overvalued right now?
Encompass Health (MEX:EHC) has a current Operating Margin % of 19.01%. The stock's GF Value™ is MXN1,344.64, compared to a current price of MXN1,280.08 — trading 4.8% below its estimated fair value. The current Operating Margin % is 19.01%, which is 19% above median its 10-year median of 16.02 and 291.6% above the Healthcare Providers & Services industry median of 4.86. Encompass Health's overall GF Score™ is 88/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Encompass Health (MEX:EHC), the current Operating Margin % is 19.01% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Encompass Health (MEX:EHC) Overvalued in 2026?
Based on GuruFocus' analysis, Encompass Health stock appears to be undervalued.
The current stock price of MXN1,280.08 is trading 4.8% below its estimated GF Value™ of MXN1,344.64.
Key valuation signals for MEX:EHC:
Operating Margin %: 19.01% (19% above median its 10-year median of 16.02)
GF Value™: MXN1,344.64 vs. price of MXN1,280.08 (4.8% below fair value)
Industry Position: 291.6% above the Healthcare Providers & Services median (#80 of 666)
No single metric tells the full story. See the MEX:EHC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Encompass Health Corp provides post-acute healthcare services in the United States through a network of inpatient rehabilitation hospitals, which is the company's sole segment. Inpatient rehabilitation contributes the majority of the firm's revenue and provides specialized rehabilitative treatment through a network of inpatient hospitals. The company's inpatient rehabilitation hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations.
88GF Score
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