Analyzing Universal Health Services Inc’s (NYSE:UHS) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess UHS’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Universal Health Services
Did UHS’s recent performance beat its trend and industry?
I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This allows me to analyze different companies on a more comparable basis, using the latest information. For Universal Health Services, its most recent trailing-twelve-month earnings is US$706.57M, which, relative to last year’s figure, Since these figures may be fairly nearsighted, I’ve created an annualized five-year figure for UHS’s earnings, which stands at US$538.18M This shows that, generally, Universal Health Services has been able to grow its earnings over the last couple of years.
How has it been able to do this? Well, let’s take a look at whether it is merely a result of industry tailwinds, or if Universal Health Services has experienced some company-specific growth. Over the past couple of years, Universal Health Services grew its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time. Looking at growth from a sector-level, the US healthcare industry has been growing, albeit, at a muted single-digit rate of 8.68% in the prior twelve months, and a substantial 10.11% over the last five years. This shows that any uplift the industry is enjoying, Universal Health Services has not been able to reap as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Universal Health Services to get a better picture of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for UHS’s future growth? Take a look at our free research report of analyst consensus for UHS’s outlook.
- 2. Financial Health: Is UHS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.