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HCA Healthcare, Inc. (NYSE:HCA): Is It A Smart Long Term Opportunity?

Simply Wall St

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On 31 March 2019, HCA Healthcare, Inc. (NYSE:HCA) released its earnings update. Generally, analyst forecasts seem fairly subdued, with earnings expected to grow by 0.5% in the upcoming year relative to the higher past 5-year average growth rate of 14%. By 2020, we can expect HCA Healthcare’s bottom line to reach US$3.8b, a jump from the current trailing-twelve-month of US$3.8b. Below is a brief commentary on the longer term outlook the market has for HCA Healthcare. Investors wanting to learn more about other aspects of the company should research its fundamentals here.

See our latest analysis for HCA Healthcare

How is HCA Healthcare going to perform in the near future?

The longer term view from the 25 analysts covering HCA is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of HCA's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NYSE:HCA Past and Future Earnings, May 30th 2019

By 2022, HCA's earnings should reach US$4.3b, from current levels of US$3.8b, resulting in an annual growth rate of 6.0%. EPS reaches $12.85 in the final year of forecast compared to the current $10.9 EPS today. However, the near term margins may change heading into 2022, from the current levels of 8.1% to 7.7%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For HCA Healthcare, I've put together three relevant factors you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is HCA Healthcare worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HCA Healthcare is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of HCA Healthcare? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.