Healthcare services company The Ensign Group (NASDAQ: ENSG). fell short of the market’s revenue expectations in Q2 CY2026, but sales rose 10.7% year on year to $1.44 billion. On the other hand, the company’s full-year revenue guidance of $5.90 billion at the midpoint came in 0.9% above analysts’ estimates. Its GAAP profit of $1.68 per share was 2.2% below analysts’ consensus estimates.
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The Ensign Group (ENSG) Q2 CY2026 Highlights:
- Revenue: $1.44 billion vs analyst estimates of $1.56 billion (10.7% year-on-year growth, 7.9% miss)
- EPS (GAAP): $1.68 vs analyst expectations of $1.72 (2.2% miss)
- Adjusted EBITDA: $181.1 million vs analyst estimates of $171.4 million (12.6% margin, 5.7% beat)
- The company lifted its revenue guidance for the full year to $5.90 billion at the midpoint from $5.84 billion, a 1% increase
- EPS (GAAP) guidance for the full year is $7.80 at the midpoint, beating analyst estimates by 10.2%
- Operating Margin: 8.5%, in line with the same quarter last year
- Sales Volumes fell 76% year on year (-59% in the same quarter last year)
- Market Capitalization: $10.03 billion
"This quarter's results are another reflection of that enduring connection between the commitment of our local leaders to delivering high-quality care in their communities and our financial performance. We believe exceptional outcomes ultimately create their own form of accountability, because residents, families, referral partners, regulators, and payers all independently validate whether an operation is truly delivering value,” said Barry Port, Chief Executive Officer of The Ensign Group.
Company Overview
Founded in 1999 and named after a naval term for a flag-bearing ship, The Ensign Group (NASDAQ: ENSG) operates skilled nursing facilities, senior living communities, and rehabilitation services across 15 states, primarily serving high-acuity patients recovering from various medical conditions.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, The Ensign Group’s sales grew at an impressive 17.7% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. The Ensign Group’s annualized revenue growth of 19.1% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
We can dig further into the company’s revenue dynamics by analyzing its number of units sold, which reached 447,826 in the latest quarter. Over the last two years, The Ensign Group’s units sold averaged 18.5% year-on-year declines. Because this number is lower than its revenue growth, we can see the company benefited from price increases. 
This quarter, The Ensign Group’s revenue grew by 10.7% year on year to $1.44 billion but fell short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 16.9% over the next 12 months, a slight deceleration versus the last two years. Despite the slowdown, this projection is healthy and suggests the market is baking in success for its products and services.
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Adjusted Operating Margin
The Ensign Group was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 9.8% was weak for a healthcare business.
Looking at the trend in its profitability, The Ensign Group’s adjusted operating margin decreased by 1.1 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. The Ensign Group’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.
This quarter, The Ensign Group generated an adjusted operating margin profit margin of 9.6%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
The Ensign Group’s EPS grew at a spectacular 13.9% compounded annual growth rate over the last five years. However, this performance was lower than its 17.7% annualized revenue growth, telling us the company became less profitable on a per-share basis as it expanded.
Diving into the nuances of The Ensign Group’s earnings can give us a better understanding of its performance. As we mentioned earlier, The Ensign Group’s adjusted operating margin was flat this quarter but declined by 1.1 percentage points over the last five years. Its share count also grew by 4.4%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. 
In Q2, The Ensign Group reported EPS of $1.68, up from $1.44 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects The Ensign Group’s full-year EPS to grow 17.3% from $6.39 to $7.49.
Key Takeaways from The Ensign Group’s Q2 Results
We were impressed by how significantly The Ensign Group blew past analysts’ full-year EPS guidance expectations this quarter. We were also glad its full-year revenue guidance slightly exceeded Wall Street’s estimates. On the other hand, its revenue missed and its EPS fell short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock traded up 4.3% to $180.39 immediately after reporting.
Is The Ensign Group an attractive investment opportunity at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).
