Ensign Group (ENSG) delivered a beat-and-raise in Q1, with strong sequential managed care growth seen rebutting clinical review concerns, RBC Capital Markets said in a note Friday.

The note said it was another "impressive" quarter, with EBITDA and EBITDAR both exceeding market expectations.

The report also said investors have focused on managed care referral volume following UnitedHealth's comments on increased clinical scrutiny to limit Skilled Nursing Facility admissions.

"We are encouraged by ENSG's strong sequential managed care census growth, robust acquisition pipeline, and management's confident tone on payer diversification," the note said.

The report also said the company continues to execute its mergers and acquisition strategy, with an accelerating pipeline into Q2 and Q3.

RBC kept its outperform rating with a price target of $222.

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