Shares of the NASDAQ-listed firm fell 8% on June 8, followed by an additional 3% drop on June 11, 2026. The decline arrived alongside scathing critiques from Hunterbrook Media and Muddy Waters Research, both of which challenged the company's long-standing claims that high-quality patient care drives its financial performance.

Hunterbrook’s report alleged that Ensign’s growth strategy relies on acquiring struggling nursing homes and subsequently slashing staff to inflate margins, despite public assertions of quality improvement. Muddy Waters expanded these allegations, claiming to have identified "red flags" at 57 facilities, including the use of "rented" nursing home administrators who were rarely present. These findings suggest a potential fraud against Medicare and Medicaid, which could result in billions of dollars in sanctions under the False Claims Act.

Reed Kathrein, the Hagens Berman partner heading the inquiry, stated that the firm is evaluating whether Ensign misled investors regarding its business practices and accounting methods. The investigation centers on the accuracy of the analysts' claims and the company's disclosures concerning its acquisitions and regulatory adherence. Hagens Berman is currently seeking input from investors who sustained significant losses and potential whistleblowers familiar with the company's internal operations.