The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Encompass Health (NYSE: EHC) and the rest of the outpatient & specialty care stocks fared in Q1.

The outpatient and specialty care industry delivers targeted medical services in non-hospital settings that are often cost-effective compared to inpatient alternatives. This means that they are more desired as rising healthcare costs and ways to combat them become more and more top-of-mind. Outpatient and specialty care providers boast revenue streams that are stable due to the recurring nature of treatment for chronic conditions and long-term patient relationships. However, their reliance on government reimbursement programs like Medicare means stroke-of-the-pen risk. Additionally, scaling a network of facilities can be capital-intensive with uneven return profiles amid competition from integrated healthcare systems. Looking ahead, the industry is positioned to grow as demand for outpatient services expands, driven by aging populations, a rising prevalence of chronic diseases, and a shift toward value-based care models. Tailwinds include advancements in medical technology that support more complex procedures in outpatient settings and the increasing focus on preventive care, which can be aided by data and AI. However, headwinds such as reimbursement rate cuts, labor shortages, and the financial strain of digitization may temper growth.

The 6 outpatient & specialty care stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 5.9% above.

Luckily, outpatient & specialty care stocks have performed well with share prices up 62.3% on average since the latest earnings results.

Encompass Health (NYSE: EHC)

With a network of 161 specialized facilities across 37 states and Puerto Rico, Encompass Health (NYSE: EHC) operates inpatient rehabilitation hospitals that help patients recover from strokes, hip fractures, and other debilitating conditions.

Encompass Health reported revenues of $1.59 billion, up 9% year on year. This print exceeded analysts’ expectations by 1.2%. Overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates.

"We are very pleased with our start to 2026 as first quarter revenue increased 9.0% and Adjusted EBITDA grew 11.2%," said Mark Tarr, President and Chief Executive Officer.

Interestingly, the stock is up 13.8% since reporting and currently trades at $113.82.

Is now the time to buy Encompass Health? Access our full analysis of the earnings results here, it’s free.

Best Q1: agilon health (NYSE: AGL)

Transforming how doctors care for seniors by shifting financial incentives from volume to outcomes, agilon health (NYSE: AGL) provides a platform that helps primary care physicians transition to value-based care models for Medicare patients through long-term partnerships and global capitation arrangements.

agilon health reported revenues of $1.42 billion, down 7.3% year on year, outperforming analysts’ expectations by 3.2%. The business had a stunning quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates.

agilon health delivered the highest guidance raise and highest full-year guidance raise among its peers. On a dimmer note, the company lost 85,000 customers and ended up with a total of 426,000. The market seems happy with the results as the stock is up 236% since reporting. It currently trades at $93.59.

Is now the time to buy agilon health? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: U.S. Physical Therapy (NYSE: USPH)

With a nationwide footprint spanning 671 clinics across 42 states, U.S. Physical Therapy (NYSE: USPH) operates a network of outpatient physical therapy clinics and provides industrial injury prevention services to employers across the United States.

U.S. Physical Therapy reported revenues of $198.3 million, up 7.9% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates.

U.S. Physical Therapy delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 8.5% since the results and currently trades at $79.90.

Read our full analysis of U.S. Physical Therapy’s results here.

LifeStance Health Group (NASDAQ: LFST)

With over 6,600 licensed mental health professionals treating more than 880,000 patients annually, LifeStance Health (NASDAQ: LFST) provides outpatient mental health services through a network of clinicians offering psychiatric evaluations, psychological testing, and therapy across 33 states.

LifeStance Health Group reported revenues of $403.5 million, up 21.2% year on year. This number topped analysts’ expectations by 4.2%. Overall, it was an exceptional quarter as it also recorded EBITDA guidance for next quarter exceeding analysts’ expectations and revenue guidance for next quarter exceeding analysts’ expectations.

LifeStance Health Group delivered the biggest analyst estimate beat and fastest revenue growth, but had the weakest guidance update in the group. The stock is up 47.6% since reporting and currently trades at $10.87.

Read our full, actionable report on LifeStance Health Group here, it’s free.

DaVita (NYSE: DVA)

With over 2,600 dialysis centers across the United States and a presence in 13 countries, DaVita (NYSE: DVA) operates a network of dialysis centers providing treatment and care for patients with chronic kidney disease and end-stage kidney disease.

DaVita reported revenues of $3.42 billion, up 6% year on year. This print surpassed analysts’ expectations by 2.1%. It was a very strong quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.

The stock is up 52.5% since reporting and currently trades at $239.46.

Read our full, actionable report on DaVita here, it’s free.

Market Update

Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership.

Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products.

By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals.

Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.