U.S. healthcare services company Tenet Healthcare Corporation (THC) declined 15.3% in the past month, underperforming the hospital industry and the S&P 500 Index. In comparison, its peers, HCA Healthcare, Inc. (HCA) and Select Medical Holdings Corporation (SEM) , have slipped 10.8% and 44.7%, respectively, during this time.The hospital industry is facing some challenges. Analysts expect that the new administration’s focus on cutting government spending and implementing changes could impact hospital profits ...

Core Viewpoint - Tenet Healthcare reported strong Q3 2024 earnings, with adjusted EPS of $2.93, exceeding estimates and more than doubling year-over-year, indicating robust operational performance despite recent stock underperformance [2][4]. Financial Performance - Adjusted net income reached $282 million, an increase of 84.3% year-over-year, surpassing management's expectations [4]. - Net operating revenues grew 1.1% year-over-year to $5.12 billion, exceeding management's guidance and consensus estimates [2][3]. - Adjusted EBITDA increased 14.5% year-over-year to $978 million, driven by improved same-hospital admissions and a favorable payer mix [5]. Segment Analysis - Hospital Operations and Services segment reported net operating revenues of $3.98 billion, down 3.4% year-over-year due to hospital divestitures, but same-hospital revenues improved by 6.1% [7]. - Ambulatory Care segment saw net operating revenues rise 21% year-over-year to $1.14 billion, attributed to facility buyouts and service line expansions [9]. Cost Management - Total operating costs decreased nearly 10% year-over-year to $4.1 billion, aided by lower salaries and higher net gains from facility sales [6]. Financial Position - As of September 30, 2024, Tenet had cash and cash equivalents of $4.1 billion, a significant increase from the previous year [12]. - Total assets rose to $29.4 billion, while long-term debt decreased by 14.2% to $12.8 billion [13]. Shareholder Returns - The company repurchased $124 million in common shares during Q3 [15]. Future Outlook - For Q4 2024, net operating revenues are projected between $5 billion and $5.2 billion, with adjusted EBITDA expected to range from $953 million to $1.05 billion [16]. - For the full year 2024, net operating revenues are forecasted between $20.6 billion and $20.8 billion, indicating a slight growth from 2023 [17]. Estimate Revisions - There has been an upward trend in earnings estimates, with a consensus shift of 7.47% in the past month [22][23]. Investment Sentiment - Tenet holds a Zacks Rank 1 (Strong Buy), reflecting positive investor sentiment and expectations for above-average returns in the coming months [25].

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of ...

Shares of Tenet Healthcare (THC) have gained 2.8% over the past four weeks to close the last trading session at $143.63, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $187.26 indicates a potential upside of 30.4%.The average comprises 19 short-term price targets ranging from a low of $153 to a high of $217, with a standard deviation of $15.55. While the lowest estimate indicat ...

Core Viewpoint - Tenet Healthcare Corporation reported strong Q3 2024 results, leading to a 19.6% increase in stock price, reflecting investor optimism for 2024 [1][2]. Financial Performance - Adjusted EPS of $2.93 exceeded Zacks Consensus Estimate by 25.8%, marking a 103.5% year-over-year increase [3]. - Net operating revenues rose 1.1% to $5.12 billion, surpassing expectations by 1.5% [3]. - The company anticipates adjusted EPS for 2024 to be between $11.12 and $11.73, up from previous guidance of $10.41 to $11.12, indicating a 63.7% rise from 2023 [4]. Demand and Growth Drivers - Strong demand for services is expected to persist, supported by improving labor market conditions and staffing solutions [5]. - The aging population and increasing disease prevalence are projected to sustain long-term demand for hospital services [6]. Strategic Initiatives - The company is focusing on quality assets and has divested non-core businesses to allocate capital for higher-return investments [7]. - Management's efforts aim to create a more predictable, capital-efficient business model, enhancing margins and free cash flow [8]. Technological Investments - Investments in AI-enabled technologies are expected to improve clinical and administrative workflows, reducing costs and enhancing patient experiences [9]. Market Performance - Year-to-date, THC stock has surged 120.3%, outperforming the industry and S&P 500 [10]. - The stock is trading at a forward earnings multiple of 14.48X, slightly above the industry average of 14.33X [12]. Future Outlook - The Zacks Consensus Estimate for THC's 2024 EPS suggests a 63.2% year-over-year increase, with revenue estimates indicating a 1% rise [12]. - The company is positioned for robust future growth due to strategic capacity expansion and favorable industry trends [16].

Tenet Healthcare (THC) , a current Zacks Rank #1 (Strong Buy), is a healthcare services company that owns and operates general hospitals and related healthcare facilities for urban and rural communities in numerous states.The company’s earnings outlook has shifted positively across the board, a bullish sign for near-term share movement.Image Source: Zacks Investment ResearchIn addition to favorable earnings estimate revisions, the stock resides in the Zacks Medical – Hospital industry, currently ranked in t ...

Momentum investing is essentially the opposite of the tried-and-tested Wall Street adage -- "buy low and sell high." Investors following this investing style typically avoid betting on cheap stocks and waiting long for them to recover. They believe instead that one could make far more money in lesser time by "buying high and selling higher."Who doesn't like betting on fast-moving trending stocks? But determining the right entry point isn't easy. Often, these stocks lose momentum once their valuation moves a ...

Economic Overview - Recent uncertainties have heightened investor fears, particularly due to a slowing GDP growth rate of 2.8%, down from 3% in the previous quarter [1] Analyst Insights - The article reflects a perspective of an equity research analyst with over 5 years of market experience, emphasizing the importance of fundamental and technical analysis in investment decisions [1]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Tenet Healthcare Corporation's unaudited condensed consolidated financial statements for the periods ended September 30, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $29.37 billion, driven by a rise in cash to $4.09 billion, while long-term debt decreased to $12.78 billion, and total equity grew to $5.43 billion Condensed Consolidated Balance Sheet Highlights (in Millions) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$29,372** | **$28,312** | | Cash and cash equivalents | $4,094 | $1,228 | | Goodwill | $10,588 | $10,307 | | **Total Liabilities** | **$21,297** | **$22,804** | | Long-term debt, net of current portion | $12,776 | $14,882 | | **Total Equity** | **$5,426** | **$3,117** | | Retained earnings (accumulated deficit) | $2,690 | $(192) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income available to common shareholders surged to $2.88 billion for the nine months ended September 30, 2024, primarily due to a $2.91 billion gain on facility sales, with diluted EPS reaching $29.27 Statement of Operations Highlights (in Millions, except per-share amounts) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net operating revenues | $15,593 | $15,169 | | Net (gains) on sales of facilities | $(2,906) | $(12) | | Operating income | $5,135 | $1,775 | | Net income available to common shareholders | $2,882 | $367 | | Diluted earnings per share | $29.27 | $3.41 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities increased to $2.38 billion, while investing activities provided $3.80 billion, primarily from $4.97 billion in facility sales proceeds, leading to a $2.87 billion net cash increase Cash Flow Summary (in Millions) | Cash Flow Activity | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,378 | $1,550 | | Net cash provided by (used in) investing activities | $3,801 | $(636) | | Net cash used in financing activities | $(3,313) | $(718) | | **Net increase in cash and cash equivalents** | **$2,866** | **$196** | | Cash and cash equivalents at end of period | $4,094 | $1,054 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail significant accounting policies, including segment reporting changes, substantial gains from hospital dispositions, ongoing Ambulatory Care acquisitions, and significant share repurchases - The company combined its Hospital Operations and Conifer segments into a single reporting segment, '**Hospital Operations and Services**' (Hospital Operations), effective Q4 2023, with all prior-period data restated to reflect this change[14](index=14&type=chunk)[17](index=17&type=chunk) - Significant asset sales were completed in 2024, including three hospitals in South Carolina (gain of **$1.677 billion**), four in California (gain of **$527 million**), two more in California (gain of **$271 million**), and five in Alabama (gain of **$357 million**)[42](index=42&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - In March 2024, the company redeemed all **$2.1 billion** of its 4.875% senior secured notes due 2026, resulting in an **$8 million** loss from early extinguishment of debt[56](index=56&type=chunk) - A new **$1.5 billion** share repurchase program was authorized in July 2024, with **$124 million** used to repurchase **795,000 shares** under this new program as of September 30, 2024[81](index=81&type=chunk)[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses performance, focusing on strategies like Ambulatory Care expansion, hospital portfolio optimization, and debt reduction, while detailing segment results, operating expenses, liquidity, and capital resources - Key strategies include expanding the Ambulatory Care segment, driving growth in hospital systems through operational effectiveness and portfolio optimization, and reducing long-term debt[139](index=139&type=chunk)[141](index=141&type=chunk)[146](index=146&type=chunk) - The company continues to face staffing shortages, particularly for nurses, and inflationary pressures on wages and medical supplies[133](index=133&type=chunk)[135](index=135&type=chunk) Adjusted EBITDA Reconciliation (in Millions) | Metric | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Net income available to common shareholders | $2,882 | $367 | | Adjustments (Interest, Taxes, D&A, etc.) | $65 | $2,162 | | **Adjusted EBITDA** | **$2,947** | **$2,529** | - Liquidity was significantly boosted by proceeds from asset sales, with cash at **$4.094 billion** and availability under the credit facility at **$1.5 billion** as of September 30, 2024[269](index=269&type=chunk) [Results of Operations by Segment](index=56&type=section&id=Results%20of%20Operations%20by%20Segment) Hospital Operations revenue decreased 0.5% (up 8.5% ex-divestitures), while Ambulatory Care revenue grew 17.5% due to acquisitions and higher net revenue per case, with a superior operating margin of 37.9% Segment Performance - Nine Months Ended Sep 30, 2024 (in Millions) | Segment | Net Operating Revenues | Operating Income | Operating Margin | | :--- | :--- | :--- | :--- | | Hospital Operations | $12,318 | $3,893 | 31.6% | | Ambulatory Care | $3,275 | $1,242 | 37.9% | - On a same-hospital basis, the Hospital Operations segment experienced a **4.9% increase** in total admissions and a **7.8% increase** in net operating revenues for the nine months ended September 30, 2024, compared to the prior year[212](index=212&type=chunk)[216](index=216&type=chunk) - The Ambulatory Care segment's revenue growth for the nine months ended September 30, 2024, was driven by a **$403 million** increase from acquisitions and a **$147 million** increase in same-facility net operating revenues[236](index=236&type=chunk) - The Ambulatory Care segment added a net of **48 facilities** in the first nine months of 2024, primarily through **51 acquisitions** and the opening of **12 de novo centers**[246](index=246&type=chunk) [Liquidity and Capital Resources](index=68&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity significantly strengthened to $4.09 billion cash, driven by $4.97 billion in asset sales proceeds, used for debt reduction and share repurchases, with projected capital expenditures of $800-$900 million - The ratio of total long-term debt (net of cash) to the last twelve months' Adjusted EBITDA was **2.22x** at September 30, 2024[263](index=263&type=chunk) - Capital expenditures for the full year 2024 are anticipated to be between **$800 million** and **$900 million**[267](index=267&type=chunk) Key Cash Flow Drivers - Nine Months Ended Sep 30, 2024 (in Billions) | Item | Amount | | :--- | :--- | | Net cash from operating activities | $2.38 | | Proceeds from sales of facilities | $4.97 | | Repayments of borrowings | $(2.21) | | Repurchases of common stock | $(0.67) | | Purchases of businesses | $(0.52) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk primarily stems from interest rates on its debt, with nearly all $12.97 billion in long-term debt carrying fixed rates, minimizing floating rate exposure - The company has minimal exposure to floating interest rates as all current long-term debt has fixed rates, except for potential borrowings under its Credit Agreement[284](index=284&type=chunk) Fixed-Rate Long-Term Debt (in Billions) | Metric | Amount | | :--- | :--- | | Total Principal | $12.969 | | Fair Value | $12.862 | | Average Effective Interest Rate | 5.7% | [Item 4. Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2024[289](index=289&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[290](index=290&type=chunk) [PART II. OTHER INFORMATION](index=74&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=74&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits and regulatory investigations, with material legal proceedings detailed in Note 12 of the Condensed Consolidated Financial Statements - For information regarding material legal proceedings, the company incorporates by reference Note 12 to the Condensed Consolidated Financial Statements[291](index=291&type=chunk) [Item 1A. Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023 - There have been no material changes to the risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2023[292](index=292&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2024, the company repurchased 795,000 shares for $124 million under its new $1.5 billion share repurchase program, with $1.376 billion remaining available Share Repurchases - Q3 2024 | Month | Shares Purchased (Thousands) | Average Price Paid | | :--- | :--- | :--- | | July 2024 | — | N/A | | August 2024 | — | N/A | | September 2024 | 795 | $155.95 | - In July 2024, the board authorized a new share repurchase program for up to **$1.5 billion** of common stock with no expiration date[293](index=293&type=chunk) [Item 5. Other Information](index=75&type=section&id=Item%205.%20Other%20Information) No directors or Section 16 officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the third quarter of 2024 - No directors or Section 16 officers adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended September 30, 2024[295](index=295&type=chunk) [Item 6. Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed with the report include certifications from the CEO and CFO, as well as Inline XBRL taxonomy documents[297](index=297&type=chunk)

| --- | --- | --- | --- | |------------------|-------|-------|-------| | 3rd Quarter 2024 | | | | | | | | | | | | | | | Earnings Release | | | | | Presentation | | | | | October 29, 2024 | | | | Cautionary Statements This presentation includes "forward looking statements." These statements relate to future events, including, but not limited to, statements regarding our liquidity, operating results, future earnings, financial position, operational and strategic initiatives, and developments in legislation, r ...