Ensign: ‘$1 Billion in Dry Powder’ for Future Expansion

Ensign Corp. has had a week, or rather a quarter. The company on Tuesday told investors that the third quarter of 2026 was an excellent one on a financial and clinical basis, with earnings topping Wall Street estimates, leading to a more than 8 percent surge in its stock price on Wednesday capped by a conference call in which company leaders said they have aggressive expansion plans for 2027 and beyond.

Company leaders spent most of the call focused on Ensign’s clinical success, laying out the case that its mission-driven excellence in providing care with localized autonomy in its cluster model fuels the powerful financial performance and ability to acquire low-performing buildings and turn them around in time.  

“We believe culture is not separate from performance. It is the foundation that makes sustainable clinical, operational, and financial performance possible. At the center of our clinical strategy is an integrated care model that we call ONE CLINICAL that empowers every healthcare discipline, including nursing and therapy to participate fully in making our residents' lives better,” said Barry Port, Ensign CEO and board chair.

“It is the clinical operating model that guides how our affiliated operations deliver care every day, and we believe it is one of the most important differentiators of our organization that has been developed over decades. We believe this clinical patient-centric model is a compounding competitive advantage that is uniquely perpetuated and refined through peer accountability in our cluster model.”

Beating the Competition on Quality

Port pointed to objective data points as proof, noting that the most recent CMS data for Ensign’s same-store facilities showed the organization achieving Quality Measure ratings that were 21 percent above the average of the states it operates in. “Likewise, these operations achieved CMS Cycle 1 survey inspection results that outperformed the average of facilities in our operating states by 15 percent and exceeded county-level averages by 28 percent,” he said.

Ensign ended the third quarter with over 80 percent of its skilled nursing operations earning a CMS Quality Measure rating of 4 or 5 stars. Exceeding national averages in every single one of the 15 Quality Measurement categories, including all five claims-based measurements. “This is also especially notable given that many of our acquisitions were 1- and 2-star buildings when we took them over,” Port said.

Ensign’s portfolio consists of 418 healthcare operations, 34 of which also include senior living operations, across 18 states. Ensign now owns 189 real estate assets, 150 of which are operated by an Ensign affiliate.

Major Expansion Looms

With clinical achievements in place, and a full bench of administrators-in-training (or CEOs as Ensign calls facility administrators), the company sees only one path forward and that is more and more acquisitions in the range of 50 to 60 buildings per year.

“Our continued ability to maintain low leverage even during periods of significant acquisitions is particularly noteworthy and demonstrates our commitment to disciplined growth as well as our belief that we can continue to achieve sustainable growth in the long run,” said Suzanne Snapper, Ensign CFO and executive vice president and director.

“In addition, we currently have more than $730 million of available capacity under our line of credit, which, when combined with our cash on our balance sheet, gives us more than $1 billion in dry powder for future investments. We also own 189 assets, 165 of which are owned completely debt free. They are gaining significant value over time, adding even more liquidity to help with future growth.”

That growth, said Chad Keetch, Ensign chief investment officer, executive vice president and secretary, will be aggressive. In answering a question during the call, he noted that while Ensign does not set growth goals, “we're very opportunistic and we take the deals that make sense.”

“In terms of looking forward, we're not in a spot where we say, okay, we want to grow by 15 percent to 20 percent in terms of bed count per year, and we're going to do that come hell or high water. So, it all depends on market conditions, pricing, obviously, our leadership pipeline, we highlight that a lot to make sure we have leaders in place.”

Keetch said given all of those conditions, “we're very comfortable growing at the pace we've been growing, 50 to 60 acquisitions a year is totally doable, if not more. As we look forward, we certainly see the deal flow is strong enough to continue to support that kind of growth.”

Florida Will Take Time

On the company’s recent acquisitions that saw it enter the Florida market, Port said Florida is a state that the company has had its eye on for a long time.

“Obviously, we've been in the Southeast for a while now, and you've seen us expand there. And Florida, given its demographics and just its sheer size and population, it's a natural state for us to enter into. I think our hesitancy up to this point has been the litigation environment is really busy. It's sort of a deterrent for operators to come into the state and certainly one of the major red flags that we've looked at over time. But that all aside, it's a really great rate environment now. It's much more stable than it used to be. It's a good labor environment,” he said.

From a regulatory standpoint, Port said Florida is probably middle of the road. “It's not easy, it's not incredibly uniquely tough either. But most importantly, it's a state where we've had one of our long-time leaders, Forrest Peterson, who's been with us for a very long time, who has prepared himself and the team to come with him into that state. He moved out earlier in the year and has been laying the groundwork for a successful transition there,” he said.

The Florida buildings are going to take time to improve and get up to Ensign’s expectations, Port said, just like recent acquisitions in Texas.

“The buildings in Texas are still not accretive, but we expect that they're going to come in way ahead of pro forma. So, possibly in the fourth quarter we'll see some contribution from those operations,” he said. “But like those Texas operations, these Florida operations are very, very challenged in pretty much every aspect clinically, financially, and physical plant. They've not been operated well, and they will take some time to come around, certainly, financially, but first and foremost, clinically.”

Occupancy Strength

Port said in healthcare, trust in the care being provided is ultimately expressed through patient choice and referral behavior.

“Hospitals, physicians, managed care organizations, patients, and families make decisions every day about where care will be delivered. Occupancy growth, therefore, is more than a financial metric. It's one of the clearest validations that an operation consistently delivers the outcomes and experience that stakeholders value,” he said.

“At 84 percent occupancy, we still have meaningful runway with many of our most mature operations consistently achieving occupancy in the mid-90 percent range. Our organic growth remains one of the most compelling drivers of our long-term performance. In addition, we continue to acquire new operations with significant long-term upside and expect to maintain a healthy pace of growth as we expand our mission-driven approach to transform and dignify post-acute care.”

Since 2024, he said Ensign has successfully sourced, underwritten, closed and transitioned 122 new operations across several markets, many of which are already performing at or above expectations, both clinically and financially.

“Due to our strong quarter and our confidence in what's ahead, we are increasing our annual 2026 earnings guidance to $7.94 to $8.02 per diluted share up from our previous guidance of $7.75 to $7.85, which we increased last quarter. We are also raising the lower end of our annual revenue guidance to $5.89 billion, while maintaining the upper end at $5.92 billion. The midpoint of our earnings guidance represents an impressive 21.5 percent increase over 2025 and 45.5 percent growth over 2024,” Port said.

AI Thrust

When queried about AI and what Ensign plans in that area, Port said, “I think the most exciting projects that we're working on and focused on revolve around clinical documentation support, coding, and compliance support. And then with a particular focus on finding ways to use AI to help our clinicians gather all the information they need on patients, both current and historical, to help them in real time with clinical decision support.”

Read the previous Park Place Ensign earnings coverage at Ensign Beats Wall Street Estimates, Posts Strong 3Q26 Earnings | Park Place.

Comments or questions? Contact Patrick Connole at pconnole@parkplacelive.com.