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HCA Holdings (HCA) Gains But Lags Market: What You Should Know

Zacks Equity Research
In the latest trading session, United States Steel (X) closed at $15.62, marking a +1.56% move from the previous day.

In the latest trading session, HCA Holdings (HCA) closed at $132.90, marking a +0.16% move from the previous day. This move lagged the S&P 500's daily gain of 0.85%. Meanwhile, the Dow gained 0.75%, and the Nasdaq, a tech-heavy index, added 1.29%.

Coming into today, shares of the hospital operator had gained 8.42% in the past month. In that same time, the Medical sector gained 9.03%, while the S&P 500 gained 12.44%.

Wall Street will be looking for positivity from HCA as it approaches its next earnings report date. This is expected to be January 29, 2019. In that report, analysts expect HCA to post earnings of $2.59 per share. This would mark year-over-year growth of 22.17%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $12.16 billion, up 5.2% from the year-ago period.

It is also important to note the recent changes to analyst estimates for HCA. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.17% higher within the past month. HCA is currently a Zacks Rank #2 (Buy).

In terms of valuation, HCA is currently trading at a Forward P/E ratio of 13.1. For comparison, its industry has an average Forward P/E of 11.92, which means HCA is trading at a premium to the group.

Also, we should mention that HCA has a PEG ratio of 1.07. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Hospital industry currently had an average PEG ratio of 1.07 as of yesterday's close.

The Medical - Hospital industry is part of the Medical sector. This group has a Zacks Industry Rank of 101, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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