The Ensign Group (Nasdaq: ENSG) in the next few months expects to close on assets in two new states, Alaska and Oregon, and leadership says the operator has significant bandwidth to grow in 35 other states.

Ensign’s footprint spans 15 states currently, including 12 new operations added in the fourth financial quarter alone, which includes 1,147 new skilled nursing beds and 16 senior living units. Six of these assets were acquired by Ensign’s captive real estate investment trust, Standard Bearer REIT. Ensign CEO Barry Port said Standard Bearer will also be announcing more acquisitions in the coming months, operated by third parties.

“We’ve acquired a lot just in the last 18 months, and we expect to continue at the same pace in 2025,” said Ensign Chief Investment Officer Chad Keetch. “In terms of the competitive landscape, there are way more deals on our desks than we could ever dream of doing. We are able to be very, very selective.”

The acquisitions add density to one of Ensign’s newest markets in Tennessee – the team looks forward to deepening its relationships in these health care communities and building a strong foundation made up of local leadership, Port said.

“We are also eager to see our first operation in Alabama gain strength and look forward to bolstering our presence in that state over time,” he added. “Entering new states is a significant undertaking that for us must be driven by a proven Ensign leader who is committed to and has a connection with the new geography.”

Ensign’s tack with new markets follows a core belief: that post-acute care is a locally-driven business. The group will continue to evaluate new states that fit their criteria, and prioritize growth in established geographies, unimpeded by “typical corporate bottlenecks,” Port said.

“We can’t wait to watch Alabama become another reflection of the template of growth and development we’ve seen across our footprint over the last 25 years,” said Port.

Ensign’s growing portfolio consists of 334 health care operations, 30 of which also include senior living operations.

Medicaid funding and the Trump administration

The prospect of Medicaid cuts were brought up briefly during the earnings call, with analysts considering Ensign’s success in bridging from Covid-era funding, or Federal Medical Assistance Percentage (FMAP) to current day. FMAP funding was discontinued when the public health emergency ended.

Port said it’s hard to know how the reconciliation process will shake out, but nursing home associations and lobbyists are ready to educate members of Congress on what the fallout will be if programs, or aspects of programs are cut.

“Our association has been really nimble and good at having language and legislative options prepared and really just a robust kind of education effort around impacts to the Medicaid program as it relates to seniors,” said Port. “It’s not clear as to what will become a priority. All we can really do is just make sure that we’re part of the education process.”

In the meantime, industry leaders can reiterate what they have heard from the administration, that they’re committed to the Medicaid program and committed to the senior care industry.

“We prepare for the worst, as always. I think having Medicaid be impacted in a broad way is going to be a pretty difficult task for Congress during the reconciliation process,” said Port. “As of now, none of our programs are really at risk that we are aware of.”

Ensign CFO Suzanne Snapper said that in a Republican administration, there’s lighter regulation and Ensign is prepared to be nimble, really utilizing that knowledge.

“There’s some flexibility in our operating model with that,” Snapper said of regulatory relief. “Our involvement at the state level is very deep, from the legislative side, as well as with all the associations that we have at each individual state.”

Fiscal performance

Ensign once again reported record clinical and financial results for Q4, building momentum in each market across its portfolio, Port said. Adjusted EBITDA margin at 11.8% for the quarter beat analyst expectations at 11.6% for The Street, and 11.5% for Stephens Inc.

Ensign has continued to showcase its ability to “consistently compound revenue [and adjusted earnings per share (EPS)] on a mid-teens plus basis,” Stephens analysts said, with 2025 guidance “now set to deliver another year of comparable growth momentum.”

The operator is seeing momentum even in its mature operations, as it simultaneously added 57 new operations across almost every market they serve, Port said, including the 12 for the quarter.

“We are very humbled by what we are able to accomplish in 2024 and we’re eager to continue to drive organic improvements and take advantage of the acquisition opportunities that we see on the horizon,” said Port.

Ensign issued 2025 earnings guidance of $6.16 to $6.34 per diluted share, and annual revenue guidance of $4.83 billion to $4.91 billion.

Ensign shares closed Friday at $131, a $4.91 drop, or decrease of 3.61% according to Yahoo Finance.