Community Health (CYH) Sells Hospital, Renews Health Net Tie-Up
With the onset of the new year, Community Health Systems, Inc. CYH announced a couple of growth-related initiatives. These include the sell-off of the Greenbrier Valley Medical Center and the renewal of collaboration with Health Net.
The Greenbrier Valley Medical Center, located in Ronceverte, WV, and equipped with 122 beds, has been divested to one of the units of Vandalia Health. The divested facility, together with its assets, physician clinic operations and outpatient services, was included as part of the divestiture deal that was inked in September 2022 and closed as soon as 2023 commenced.
Community Health continues to remain active on the divestiture front for the past few years. Through such sell-offs, CYH sheds non-core assets and intensifies its focus on business areas that fetch higher returns.
Management believes the completion of divestitures might bring down the debt burden and associated interest expenses of the company. Additionally, the same can also boost the cash-generating abilities of Community Health.
It can be said that divestitures are bearing fruits for Community Health as its long-term debt reduced to $11,943 million as of Sep 30, 2022 from $12,109 million at 2021-end. Debt refinancing activities reduced interest expenses in the first nine months of 2022 from the prior-year comparable period.
Just a day before the Greenbrier Valley Medical Center was divested, CYH undertook another growth-related move. It agreed to renew ties with Health Net, a subsidiary of a well-known U.S. healthcare services provider Centene Corporation CNC. Subsequently, the comprehensive services suite of Community Health can be uninterruptedly availed by the current and future Health Net members enrolled in commercial, Medicare and Medi-Cal plans.
A robust footprint of Community Health, substantiated by its extensive suite of hospitals and clinics, a health plan and a growing physician network throughout the Central Valley, might have intrigued Health Net to continue choosing CYH to serve its regional members.
Community Health has relied on acquisitions and partnerships to bolster medical service offerings, business scale and nationwide presence. It has an effective telehealth platform, which CYH has built over the year with partnerships and technology investments.
The remote care platform will continue to offer a steady source of income to Community Health, considering the persistent emergence of new COVID-19 variants. This might compel people to continue to prefer receiving much-needed healthcare services from the comfort of one’s homes.
Shares of Community Health have surged 83.3% in the past three months compared with the industry’s growth of 17%.
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CYH currently has a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Some better-ranked stocks from the Medical space are STAAR Surgical Company STAA and Lantheus Holdings, Inc. LNTH. While STAAR Surgical sports a Zacks Rank #1 (Strong Buy), Lantheus carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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The Zacks Consensus Estimate for STAAR Surgical’s 2023 earnings has moved 7.3% north in the past 60 days. Shares of the company have dropped 30.8% in the past three months.
Lantheus’ earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average being 51.09%. The Zacks Consensus Estimate for LNTH’s 2023 earnings suggests an improvement of 10%, while the same for revenues indicates growth of 11.9% from the respective year-ago reported figures.
The Zacks Consensus Estimate for Lantheus’ 2023 earnings has moved 0.2% north in the past 30 days. Shares of LNTH have declined 34.7% in the past three months.
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Community Health Systems, Inc. (CYH) : Free Stock Analysis Report
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