Ensign Group (ENSG) Stock Forecast & Price Target

Ensign Group Inc demonstrated solid performance in 2Q25, with the skilled services segment reporting a year-over-year actual patient days growth of 2.4% and an occupancy rate improvement of approximately 160 basis points, reaching 82.1%. Furthermore, the same-facility occupancy for the period also exhibited a notable increase, highlighting organic growth support for consolidated results, while the skilled mix improved by 150 basis points to 32.4%. Transitioning facilities played a significant role in revenue growth, achieving an impressive 11.6% year-over-year revenue increase, fueled by enhanced occupancy rates and actual patient days growth.

Ensign Group could face significant challenges due to potential reductions in Medicaid funding, which may adversely affect the ability of the industry to acquire necessary clinical staff and impact the performance of newly transitioned facilities in meeting same-facility KPIs. These funding reforms introduce substantial uncertainty regarding future organic growth prospects within the skilled nursing facility (SNF) operations, despite the company catering to a high-need population. Additionally, the Cost of Services ratio remained unchanged at a high level of 79.2% in the second quarter of 2025, indicating persistent cost pressures that may hinder profitability.