Enhabit Inc. (NYSE: EHAB) is applying three key strategies to advance their hospice business, including organic growth, de novos and potential acquisitions.

The company currently operates nearly twice as many home health locations than hospice sites. Consequently, their de novo and M&A strategies are weighted more towards hospice, with the goal of co-locating their two businesses, according to CFO Ryan Solomon.

“We’ve talked about de novo growth, which we targeted roughly 10 sites a year. That tends to be a little bit more indexed towards the hospice side …,” Solomon said at the Goldman Sachs Annual Global Healthcare Conference. “M&A; on a more small, medium-sized, targeted, strategic tuck-in basis, is a capability we look to prioritize as we think about late this year and early spring. We do think that, similar to the de novo strategy, our M&A would likely more bias towards the hospice side.”

Enhabit’s de novos are anticipated to be a 60/40 split, weighted towards hospice. For M&A, the company would pursue an 80/20 split.

Enhabit operates more than 225 home health locations and 110 hospice locations across 34 states. For growth, the company is highly reliant on its de novo strategy. Enhabit opened one new location so far in 2025, with 13 more in the works, Jacobsmeyer said. Enhabit opened five new hospice operations during 2024, building on seven that were established during 2022 and 2023.

The company’s Q1 net service revenue reached $259.9 million, down from $26.4 million year over year, with the decline attributed to challenges in its home health business. Meanwhile, hospice revenue rose 20.5% to $59.3 million, up from $49.2 million in the prior year’s quarter.

Enhabit CEO Barbara Jacobsmeyer pointed to a few major tailwinds that are buoying hospice business, including favorable demographics with the aging population and a greater acceptance and understanding of hospice care among the public. However, education for referral sources remains a key marketing strategy.

“Many referral sources struggle to talk about end-of-life care, and so it’s really encouraging them. The patient has the benefit. They feel the patient may be eligible for the benefit; we’re happy to talk with the patient about that benefit,” Jacobsmeyer said at the conference. “The referral source struggles to refer early on. So it’s about the education at that referral source level and letting them know that we would be the ones that would be happy to talk.”