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Tenet Healthcare (THC) Unit Ties Up to Boost Urology Services

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Tenet Healthcare Corporation’s THC subsidiary, United Surgical Partners International (“USPI”), recently inked a definitive deal with the well-established urology affiliate practices network of the United States – United Urology Group (“UUG”). The deal revolves around creating a joint venture partnership, through which the largest U.S. ambulatory platform — USPI — will purchase part of UUG’s ownership interests in 22 ambulatory surgery centers (ASCs) situated across Maryland, Colorado and Arizona.

Subject to regulatory approvals and closing conditions, the transaction is expected to close in the third quarter of 2022. On closing the deal, USPI will not only be in charge of enhancing the growth of ASCs with its innovative capabilities and operational knowledge but also be entrusted with the joint ownership of the centers along with UUG and its affiliated practices. Meanwhile, the centers will be included within the financial statements of Tenet Healthcare.

The recent deal seems to be a win-win situation for both the partners involved in the joint venture. The expanding urology service line of USPI is likely to receive a boost with the inclusion of UUG and its affiliated practice ASCs in the former’s portfolio.

Concurrently, the partnership network of USPI will be widened comprising more than 140 well-known urology physicians due to the latest joint venture partnership with UUG. For benefiting UUG and its affiliated practices, USPI will accelerate the extension of ASCs across new markets and pave the way for enhanced and more accessible patient care.

Initiatives similar to the latest one highlight prudence exhibited by Tenet Healthcare, which remains in charge of operating USPI’s facilities. While choosing UUG as a partner, which is best known for providing commendable urologic care, the THC subsidiary will be equipped to introduce high-quality urology centers across its existing markets, with the help of which it can reach out to more patients.

With the portfolio of USPI’s ASCs constantly growing through moves similar to the latest one, the Ambulatory Care segment of the parent company benefits in return. The ASCs and surgical hospitals of USPI, in which Tenet Healthcare holds a majority stake of around 95% as of Mar 31, 2022, are contained within the Ambulatory Care segment.

As of Mar 31, 2022, USPI held ownership interests in 404 ASCs and 24 surgical hospitals across 34 states. THC remains steadfast in pursuing buyouts, organic growth, building new outpatient centers and strategic tie-ups to boost the growth prospects of its Ambulatory Care segment.

Shares of Tenet Healthcare have dropped 23.7% in a year compared with the industry’s decline of 23.8%.

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Zacks Rank & Key Picks

Tenet Healthcare currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Medical space are ShockWave Medical, Inc. SWAV, Lantheus Holdings, Inc. LNTH and AMN Healthcare Services, Inc. AMN, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ShockWave Medical’s earnings surpassed estimates in each of the last four quarters, the average surprise being 189.99%. The Zacks Consensus Estimate for ShockWave Medical’s 2022 earnings is pegged at $1.84 per share, which compares favorably with a loss of 26 cents reported in the year-ago period. The consensus mark for SWAV’s 2022 earnings has moved north by 25.2% in the past 60 days.

Lantheus delivered a trailing four-quarter earnings surprise of 77.82%, on average. The Zacks Consensus Estimate for Lantheus’ 2022 earnings stands at $3.04 per share, which indicates an increase of more than sixfold year over year. The same for revenues suggests an improvement of 93.5% year over year. The consensus mark for LNTH’s 2022 earnings has moved north by 48.3% in the past 60 days.

The bottom line of AMN Healthcare outpaced earnings estimates in each of the last four quarters, the average surprise being 15.60%. The Zacks Consensus Estimate for AMN Healthcare’s 2022 earnings indicates a 30.3% improvement from the prior year’s reported figure, while the same for revenues suggests 25.9% growth year over year. The consensus mark for AMN’s 2022 earnings has moved north by 3.3% in the past 30 days.

Shares of Lantheus and AMN Healthcare have rallied 38.2% and 7.6%, respectively, in a year. However, ShockWave Medical stock has declined 13.5% in the same period.


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