Ensign

Ensign Group Inc earns a 3-star quantitative star rating, illustrating our stance that this share class is a balanced choice, but prudent investors should consider looking elsewhere. The stock currently trades at a 7% discount to our quantitative fair value estimate of $185.09 per share; however, some caution is warranted due to this estimate's medium uncertainty rating.

The firm's solid growth increases our estimated fair value. Consistent revenue and earnings growth indicates a company's potential for increased market share and profitability. For example, the firm's revenue 3-year growth of 16.1% sits in the top 30% globally. Robust trailing three-year revenue growth portends a favorable future trajectory, which contributes to our view that shares are undervalued.

Alternatively, the firm's valuation metrics are potentially concerning. A company's valuation metrics provide insights into the market's expectations for its future growth and profitability. The firm's book value yield of 24.4%, for example, lies in the bottom 30% compared with global peers. The market value of this company's shares looks expensive relative to the book (accounting) value of equity, which, despite our favorable price/fair value ratio, is a negative attribute.

In addition to the aforementioned drivers, our model considers momentum as part of its comprehensive analysis. This share class has outperformed the broader universe over the past year. This outperformance bodes well for future returns in light of other contributors to our model.

The company's narrow quantitative moat rating indicates it could outearn its cost of capital and maintain robust margins for 10 years or longer. In addition, the company's moderate financial health score is decent and doesn't seriously concern us with regard to financial distress.