Tenet Healthcare (THC) came out with quarterly earnings of $4.36 per share, beating the Zacks Consensus Estimate of $3.11 per share. This compares to earnings of $3.22 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 40.19%. A quarter ago, it was expected that this hospital operator would post earnings of $2.93 per share when it actually produced earnings of $3.44, delivering a surprise of 17.41%.Over the last four quarters, th ...

Tenet Reports Strong First Quarter 2025 Results DALLAS — April 29, 2025 — Tenet Healthcare Corporation (Tenet) (NYSE: THC) today announced its results for the quarter ended March 31, 2025. "We had an excellent start to the year driven by strong same-store revenue growth and operational discipline, resulting in earnings and cash flows well ahead of our expectations," said Saum Sutaria, M.D., Chairman and Chief Executive Officer of Tenet. "We continue to expand access to high-quality specialty care as we effe ...

In its upcoming report, Tenet Healthcare (THC) is predicted by Wall Street analysts to post quarterly earnings of $3.11 per share, reflecting a decline of 3.4% compared to the same period last year. Revenues are forecasted to be $5.14 billion, representing a year-over-year decrease of 4.3%. Over the last 30 days, there has been an upward revision of 0.1% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their init ...

Core Viewpoint - Tenet Healthcare (THC) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2] Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [3] - Institutional investors utilize earnings estimates to calculate the fair value of a company's shares, leading to stock price movements based on their buying or selling activities [3] Tenet's Earnings Outlook - The rising earnings estimates for Tenet indicate an improvement in the company's underlying business, which is expected to positively influence its stock price [4] - Analysts have raised their earnings estimates for Tenet, with the Zacks Consensus Estimate increasing by 7.3% over the past three months [7] Zacks Rank System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [6] - The upgrade of Tenet to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9]

Company Overview - Tenet Healthcare (THC) is expected to report a year-over-year decline in earnings and revenues for the quarter ended March 2025, with earnings projected at $3.12 per share, down 3.1%, and revenues at $5.17 billion, down 3.7% [3][4] - The earnings report is scheduled for release on April 29, 2025, and actual results that exceed expectations could lead to a stock price increase, while a miss could result in a decline [2][3] Earnings Estimates and Trends - The consensus EPS estimate has been revised 0.22% lower in the last 30 days, indicating a reassessment by analysts [4] - The Most Accurate Estimate for Tenet is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.72%, suggesting a likelihood of beating the consensus EPS estimate [10][11] Earnings Surprise History - Tenet has a history of exceeding consensus EPS estimates, having beaten expectations in the last four quarters, including a +17.41% surprise in the most recent quarter [12][13] Industry Context - In comparison, Universal Health Services (UHS), another player in the medical-hospital industry, is expected to post earnings of $4.36 per share, reflecting a year-over-year increase of +17.8%, with revenues projected at $4.14 billion, up 7.8% [17] - UHS has seen a 0.7% upward revision in its EPS estimate over the last 30 days, but currently has a negative Earnings ESP of -0.83%, making it difficult to predict a beat despite a Zacks Rank of 1 (Strong Buy) [18]

Group 1 - Tenet Healthcare Corporation (THC) is experiencing significant activity in the options market, particularly with the May 16, 2025 $80.00 Call showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to a rally or sell-off [2] - Analysts have mixed views on Tenet Healthcare, with three increasing their earnings estimates for the current quarter from $2.96 to $3.12 per share, while two have decreased their estimates [3] Group 2 - The high implied volatility surrounding Tenet Healthcare may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4]

Core Viewpoint - Tenet Healthcare Corporation (THC) has shown significant stock performance, with a 26.9% increase over the past year, outperforming the industry and broader market indices [1] Financial Performance - Tenet Healthcare's market capitalization stands at $12.7 billion, with a closing stock price of $133.04 [1] - The company generated $1.1 billion in free cash flow over the trailing 12 months, with a price-to-free cash flow ratio of 11.43X, lower than the medical sector average of 21.57X, indicating strong financial stability [5] - Tenet Healthcare ended the fourth quarter with $3 billion in cash and cash equivalents, more than double its year-end 2023 balance, while long-term debt decreased by 12.1% to $13.1 billion [6] - The net debt-to-EBITDA ratio improved to 2.61X, significantly below its five-year median of 4.64X and the industry average of 3.29X [7] Growth Drivers - The company is focusing on expanding its ambulatory surgery centers through collaboration with United Surgical Partners International (USPI), which operates 518 ASCs and 25 surgical hospitals across 37 states [3] - Investments in AI-driven technologies aim to enhance clinical and administrative processes, reduce costs, and improve patient satisfaction [4] Valuation - Tenet Healthcare's forward price-to-earnings ratio is 10.72X, lower than its five-year median of 11.94X and the industry average of 12.34X, indicating it is relatively undervalued compared to peers [8] Earnings Estimates - The Zacks Consensus Estimate for 2025 adjusted earnings is $12.15 per share, with upward revisions in the past 30 days, and a projected 10.5% growth for 2026 [11]

Company Performance - Tenet Healthcare (THC) ended the recent trading session at $133.04, showing a +1.73% change from the previous day's closing price, outperforming the S&P 500's daily loss of 1.12% [1] - The stock has decreased by 2.82% over the past month, contributing to the Medical sector's loss of 2.99% and the S&P 500's loss of 2.91% [1] Earnings Forecast - The upcoming earnings report for Tenet Healthcare is anticipated to show an EPS of $3.11, reflecting a 3.42% decline compared to the same quarter last year [2] - The Zacks Consensus Estimate for revenue is projected at $5.17 billion, down 3.71% from the year-ago period [2] Annual Estimates - For the entire year, the Zacks Consensus Estimates forecast earnings of $12.12 per share and revenue of $20.84 billion, indicating changes of +2.02% and +0.85%, respectively, compared to the previous year [3] - Recent changes to analyst estimates for Tenet Healthcare indicate the dynamic nature of near-term business trends, with positive revisions suggesting analyst optimism regarding the company's business and profitability [3] Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that 1 stocks have generated an average annual return of +25% since 1988 [5] - Currently, Tenet Healthcare holds a Zacks Rank of 3 (Hold), with a 0.61% decline in the Zacks Consensus EPS estimate over the past month [5] Valuation Metrics - Tenet Healthcare's Forward P/E ratio is 10.8, which is a premium compared to the industry's average Forward P/E of 10.45 [6] - The company has a PEG ratio of 0.98, which is lower than the industry average PEG ratio of 1.07 [6] Industry Overview - The Medical - Hospital industry, part of the Medical sector, has a Zacks Industry Rank of 81, placing it in the top 33% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups by evaluating the average Zacks Rank of individual stocks, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Group 1 - Healthcare stocks are currently facing significant challenges, with many testing new 52-week lows [1] - Speculation regarding potential Medicaid cuts is exacerbating the difficulties within the healthcare sector [1] Group 2 - The article reflects a broader concern about the state of healthcare investments and the potential for undervalued opportunities [1]

Valuation and Financial Performance - Tenet Healthcare Corporation (THC) is currently trading at a forward price-to-earnings (P/E) ratio of 10.78X, which is lower than its five-year median of 11.94X and the industry average of 12.05X, indicating it is relatively undervalued compared to peers like HCA Healthcare, Inc. (12.60X) and Encompass Health Corporation (20.60X) [1] - The company generated $1.1 billion in free cash flow over the past 12 months, with a price-to-free cash flow (P/FCF) ratio of 11.21X, significantly below the broader medical sector's average of 22.75X, suggesting financial stability and efficient capital management [2] - Tenet's stock has increased by more than 40% in the past year, outperforming both the industry average and the S&P 500 Index [4] Earnings and Growth Drivers - In its latest quarterly report, Tenet posted adjusted earnings per share (EPS) of $3.44, exceeding the Zacks Consensus Estimate by 17.4% and outperforming management's projected range of $2.69-$3.31, driven by higher same-hospital admissions and a favorable payer mix [6] - The company forecasts adjusted EBITDA for 2025 to be between $3.975 billion and $4.175 billion, indicating a 2% year-over-year growth, with an adjusted EBITDA margin expected in the range of 19.3-19.9% [8] - The Zacks Consensus Estimate for 2025 adjusted earnings is currently pegged at $11.84 per share, with five upward estimate revisions in the past 30 days, and the consensus for 2026 EPS indicates 13.6% further growth [11] Debt Management and Financial Position - Tenet ended the fourth quarter with $3 billion in cash and cash equivalents, more than double its 2023 year-end balance, while long-term debt declined 12.1% to $13.1 billion [7] - The net debt-to-EBITDA ratio has improved to 2.61X, well below its five-year median of 4.64X and the industry average of 3.24X [8] Strategic Initiatives - Tenet is focusing on expanding its ambulatory surgery centers (ASCs) through a partnership with United Surgical Partners International (USPI), which held stakes in 518 ASCs and 25 surgical hospitals across 37 states by the end of the fourth quarter [9] - The company is investing in AI-driven technologies to streamline clinical and administrative processes, aiming to reduce costs and improve patient satisfaction [10] Market Outlook - The stock is currently trading below Wall Street's average price target of $174.83, implying a 32.7% upside from current levels [15] - Improving labor market conditions and higher patient admissions are expected to provide additional support for the stock's growth [17]