Tenet Healthcare Corporation THC will report first-quarter 2019 results on Apr 29 after market close. In the last reported quarter, the company delivered a positive surprise of 112.5%. However, the bottom line plunged 63.6% year over year, mainly due to weak operating revenues.
Let’s see how things are shaping up prior to this announcement:
In the to-be-reported quarter, the company’s performance is likely to suffer a decline in revenues due to reduced admissions, inpatient and outpatient surgeries, emergency department visits and total outpatient visits.
Weak performances by its segments, namely Conifer and Hospital operations plus other segments might also negatively impact its revenue stream. Conifer’s bottom line is likely to be hurt by hospital divestitures.
The Zacks Consensus Estimate for the company’s total revenues in the to-be reported quarter stands at $4.5 billion, indicating 40.6% fall from the year-ago reported figure.
The Zacks Consensus Estimate for the stock’s earnings is pegged at 30 cents, suggesting 47.4% decrease from the prior-year reported number. The metric is likely to be affected in the upcoming quarterly results due to lower revenues.
However, overdependence on debt to fund the growth-related investments raises the financial risk for Tenet Healthcare.
What the Quantitative Model States
Our proven model does not conclusively show that Tenet Healthcare is likely to beat on earnings this to-be-reported quarter. This is because the stock has the right combination of a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen, which is not the case here.
Earnings ESP: Tenet Healthcare has an Earnings ESP of -10.89%. This is because the Most Accurate Estimate is pegged at 27 cents, lower than the Zacks Consensus Estimate of 30 cents. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Tenet Healthcare Corporation Price and EPS Surprise
Tenet Healthcare Corporation Price and EPS Surprise | Tenet Healthcare Corporation Quote
Zacks Rank: Tenet Healthcare carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s negative ESP in the combination leaves surprise prediction inconclusive for the stock this reporting cycle.
We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Some stocks worth considering from the medical sector with the perfect combination of elements to surpass estimates in the next releases are as follows:
Aduro Biotech, Inc. ADRO is slated to release third-quarter earnings figures on May 1. This stock has an Earnings ESP of +82.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
bluebird bio, Inc. BLUE has an Earnings ESP of +12.12%. This #3 Ranked company is set to report third-quarter earnings on May 1.
Humana Inc. HUM is set to report first-quarter 2018 earnings performance on May 1. The stock has an Earnings ESP of +0.84% and a Zacks Rank of 3.
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