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Tenet Healthcare (THC) Gains But Lags Market: What You Should Know

Zacks Equity Research

Tenet Healthcare (THC) closed the most recent trading day at $13.19, moving +1.38% from the previous trading session. This change lagged the S&P 500's 2.28% gain on the day. Elsewhere, the Dow gained 2.24%, while the tech-heavy Nasdaq added 1.72%.

Heading into today, shares of the hospital operator had lost 54.76% over the past month, lagging the Medical sector's loss of 8.8% and the S&P 500's loss of 16.08% in that time.

THC will be looking to display strength as it nears its next earnings release. In that report, analysts expect THC to post earnings of $0.51 per share. This would mark a year-over-year decline of 5.56%. Our most recent consensus estimate is calling for quarterly revenue of $4.72 billion, up 3.95% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.83 per share and revenue of $19.23 billion. These totals would mark changes of +5.6% and +4.09%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for THC. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 3.71% lower. THC is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, THC currently has a Forward P/E ratio of 4.6. This represents a discount compared to its industry's average Forward P/E of 7.31.

Investors should also note that THC has a PEG ratio of 0.53 right now. 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. Medical - Hospital stocks are, on average, holding a PEG ratio of 0.65 based on yesterday's closing prices.

The Medical - Hospital industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 101, which puts 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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