Financial Data and Key Metrics Changes - The company reported net operating revenues of $5.2 billion and consolidated EBITDA of $1.163 billion, representing a 14% growth over 2024 [5][12] - Adjusted EBITDA margin improved by 320 basis points to 22.3% in Q1 2025 [5][12] - Free cash flow generated in Q1 was $642 million, with $3 billion in cash on hand and no borrowings under the credit facility [15][16] Business Line Data and Key Metrics Changes - USPI generated $456 million in adjusted EBITDA, a 16% increase over Q1 2024, with same facility revenues growing by 6.8% [5][13] - Hospital segment adjusted EBITDA grew to $707 million, with same store hospital admissions up 4.4% and revenue per adjusted admission increasing by 2.8% [6][14] Market Data and Key Metrics Changes - The company experienced a 35% increase in exchange admissions in Q1 2025, with exchange revenues now accounting for about 7% of total consolidated revenues [47] - The payer mix remained stable, with managed care representing around 70% of net patient revenues [46] Company Strategy and Development Direction - The company plans to invest approximately $250 million annually in M&A opportunities within the ambulatory space [8][21] - There is a focus on expanding capacity and enhancing service offerings in higher acuity areas, while maintaining operational discipline and cost management [11][94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year targets despite not adjusting guidance early in the year, citing strong fundamentals and operational performance [17][18] - The company remains committed to a deleveraged balance sheet to support capital allocation priorities and shareholder value [10][16] Other Important Information - The company repurchased 2.6 million shares for $348 million in Q1 2025, indicating a strategy to leverage cash flow for share repurchases [10][16] - Management emphasized the importance of maintaining operational discipline and effective cost management to navigate potential economic stresses [11][94] Q&A Session Summary Question: Guidance and Q1 Performance - Management confirmed no other out-of-period items besides the $40 million Medicaid supplemental revenue and highlighted strong revenue per case growth driven by acuity and strategic opportunities [24][26] Question: USPI Acquisition Pipeline - The acquisition pipeline is healthy, with confidence in deploying the $250 million investment goal, and a focus on diversifying service lines [29][30] Question: Hospital Segment Margins - Management noted that operational strength and effective expense management contributed to better-than-expected margins, with no significant outliers affecting performance [34][36] Question: Labor Management Initiatives - The company is focused on recruiting and retaining staff to improve overall labor performance, with a strategy to balance contract labor usage [42][44] Question: Acuity and Payer Mix - Continued strength in acuity and payer mix was reported, with a 35% increase in exchange admissions contributing positively to revenue [46][47] Question: Supply Chain and Tariffs - The company is actively engaged in managing supply costs and has no significant changes in procurement strategies between ambulatory and hospital segments [83][84] Question: Contingency Plans for Policy Changes - Management is prioritizing growth and operational efficiency while monitoring potential policy changes, with contingency planning in place but not currently prioritized [95][96] Question: Total Joint Market Evolution - There is significant potential for growth in the total joint market, with ongoing shifts towards outpatient settings and higher acuity procedures [102][103] Question: Margin Expansion Potential - Management believes there is room for margin expansion through improved operating discipline, better cost structures, and increased asset utilization [108][110]

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 ...

Industry Overview - The Zacks Medical-Hospital industry consists of for-profit hospital companies providing various healthcare services, including acute care, rehabilitation, and psychiatric care [3] - Revenue generation is influenced by inpatient occupancy levels, medical services ordered, and outpatient procedure volumes [3] - Payments for services come from government programs like Medicare and Medicaid, managed care plans, private insurers, and directly from patients [3] Key Trends Shaping the Hospital Industry - Growing patient volumes are driven by the resumption of elective procedures post-pandemic, with the 65+ age group projected to increase from 17.3% in 2022 to 22.8% by 2050 [4] - Health spending is expected to reach $5.3 trillion by 2025, indicating strong demand for healthcare services [4] - Rising costs are a concern, but programs like the Affordable Care Act are anticipated to support continued growth [4] Managing Cost Pressures - Hospitals are facing rising expenses due to increased patient volumes and higher supply, labor, and benefit costs [5] - Strategies to counter these pressures include improving labor productivity, adopting cost-saving technologies, and enhancing operational efficiency [5] - Stabilizing patient volumes and renegotiated supplier contracts are expected to strengthen cost control [5] Embracing the Digital Shift - The healthcare sector is accelerating the adoption of AI, automation, and real-time analytics to enhance patient care and streamline operations [6] - Telehealth and telemedicine have become essential components of modern healthcare delivery, especially post-pandemic [6] Rising M&A Activity - Mergers and acquisitions are a key growth catalyst, with the industry expected to see continued deal activity driven by capacity expansion and efficiency goals [7] - Economic stabilization is likely to boost confidence in consolidation efforts within the fragmented industry [7] Zacks Industry Rank Shows Promise - The Zacks Medical-Hospital industry currently holds a Zacks Industry Rank of 27, placing it in the top 11% of nearly 250 Zacks industries [9] - Positive earnings outlook and revisions indicate optimism about the industry's growth potential [10] Industry Performance - The Zacks Medical-Hospital industry has outperformed the Zacks Medical sector and the S&P 500, gaining 3% year-to-date compared to the sector's 3.3% decline and the S&P 500's 6.4% fall [12] Industry's Current Valuation - The industry trades at a trailing 12-month EV/EBITDA ratio of 7.48X, significantly lower than the S&P 500's 16.31X and the sector's 10.48X [15] - Over the past five years, the industry has seen an EV/EBITDA range of 6.16X to 9.55X, with a median of 7.99X [15] Company Highlights - **Universal Health Services**: Focuses on acute care hospitals and outpatient centers, with growth driven by rising patient days and an expanding care network [18] - **Tenet Healthcare Corporation**: Operates a broad network of hospitals, with strong revenue growth in its Ambulatory Care segment [22] - **HCA Healthcare**: Positioned for growth with rising patient volumes and expansion into telemedicine [26] - **Community Health Systems**: Focuses on telehealth and hospital acquisitions to enhance specialty services and improve cost efficiency [28]

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]