Tenet Healthcare (THC) Rides on Strong Patient Volumes, Buyouts
Tenet Healthcare Corporation THC remains well-poised for growth on the back of solid top-line growth, an expanding healthcare portfolio and a notable financial position.
Let’s delve deeper.
Earnings Surprise History
Tenet Healthcare boasts a solid earnings surprise record. Its earnings have outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 25.88%.
Growing Revenues
Tenet Healthcare’s revenues gain on the back of growing patient volumes, driven by improved adjusted admissions and outpatient visits. The resumption of pent-up elective procedures may bolster patient days for healthcare facility operators in the days ahead. Also, an aging U.S. population is likely to sustain the solid demand for THC’s hospital services.
Strong contributions by Hospital, Ambulatory and Conifer segments should help sustain the top-line growth momentum of Tenet Healthcare. Management anticipates total revenues to be between $20.1 billion and $20.5 billion for 2023, the midpoint of which indicates an improvement of 5.7% from 2022 reported figure.
Expansion Endeavors
Tenet Healthcare resorts to numerous acquisitions and partnerships for enhancing its capabilities, diversifying treatment network and boosting geographical presence. This month, THC teamed up with Oracle Fusion Cloud Human Capital Management to advance its payroll processes and human resources. It operated an expansive care network of 61 acute care and specialty hospitals as of Jun 30, 2023. THC aims to hold an ownership stake in and operate ambulatory surgery centers ranging between 575 and 600 by 2025 end.
Commendable Financial Stand
For pursuing business investments and capital distribution efforts, a solid financial position is of dire need and the same is the case with Tenet Healthcare. Growing cash reserves and robust cash-generating abilities bear testament to its financial strength. Cash and cash equivalents of $934 million stand way higher than the short-term debt of $141 million as of Jun 30, 2023. THC generated cash from operations worth $1 billion in the first half of 2023, which increased three-fold from the prior-year comparable period. Its leverage ratio has been improving for a while.
Apart from Tenet Healthcare, other medical stocks such as Universal Health Services, Inc. UHS, HCA Healthcare, Inc. HCA and Encompass Health Corporation EHC undertake continuous expansion plans for bolstering their healthcare portfolios.
Universal Health pursues an expansion strategy in the form of acquiring, constructing or leasing other hospital facilities, which in turn, has empowered it to step into new markets and boost healthcare delivery capabilities. The diversified treatment network of UHS comprised 358 inpatient facilities and 42 outpatient and other facilities stretched throughout 39 states, Washington, D.C., the U.K. and Puerto Rico as of Jun 30, 2023.
HCA Healthcare undertakes buyouts in a bid to boost business scale, improve patient volumes and add more hospitals to its healthcare portfolio. It spent $124 million on acquisition of hospitals and health care entities in the first half of 2023. HCA operated 182 hospitals and roughly 2,300 ambulatory sites of care, across 20 states and the U.K. as of Jun 30, 2023.
Encompass Health follows an active expansion endeavor throughout the year in the form of disclosing plans to set up inpatient rehabilitation hospitals across different U.S. communities and inaugurating the same within a reasonable time period. These efforts have bolstered its medical service offerings, business scale and nationwide presence. As of Jun 30, 2023, EHC operated 158 inpatient rehabilitation hospitals across 37 states and Puerto Rico.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Universal Health Services, Inc. (UHS) : Free Stock Analysis Report
Tenet Healthcare Corporation (THC) : Free Stock Analysis Report
HCA Healthcare, Inc. (HCA) : Free Stock Analysis Report
Encompass Health Corporation (EHC) : Free Stock Analysis Report
