Industry Overview - The Zacks Medical-Hospital industry includes for-profit hospital companies providing various healthcare services, such as acute care, rehabilitation, and psychiatric services [3] - Revenue generation is influenced by inpatient occupancy levels, medical services ordered by physicians, 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 - Rising patient demand is noted, particularly with an increase in elective procedures, while the 65+ population is projected to grow from 17.3% in 2022 to 22.8% by 2050 [4] - Health spending is expected to reach $5.3 trillion by 2025, but there is a shift from inpatient to outpatient and home-based services, leading to underused hospital beds [4] - Labor shortages, higher wages, and supply chain disruptions are squeezing hospital margins, prompting providers to adopt automation and refine staffing models [5] - Hospitals are investing in AI, automation, and real-time analytics to improve care delivery and operational efficiency [6] Consolidation and M&A Activity - Consolidation through mergers and acquisitions is a key strategy for hospitals to scale operations and increase market share in a fragmented market [2] - Post-pandemic, M&A activity has rebounded as hospitals seek efficiency and financial resilience, driven by economic recovery and regulatory clarity [7] Financial Performance and Outlook - The Zacks Medical-Hospital industry currently holds a Zacks Industry Rank of 181, placing it in the bottom 26% of nearly 250 Zacks industries, indicating challenging near-term prospects [8] - Aggregate earnings estimates for the industry have decreased by 0.2% since February-end, reflecting a negative outlook for earnings growth [9] - The industry has gained 4.2% over the past year, underperforming the S&P 500's 13.1% but outperforming the broader Medical sector's decline of 17.6% [11] Current Valuation - The industry trades at a trailing 12-month EV/EBITDA ratio of 7.84X, compared to the S&P 500's 17.79X and the sector's 9.72X [14] - Over the past five years, the industry's EV/EBITDA ratio has ranged from a high of 9.55X to a low of 6.45X, with a median of 8.03X [14] Notable Companies - **HCA Healthcare**: Positioned to benefit from rising patient volumes, with a projected 15% year-over-year EPS growth for 2025 and a 5.7% revenue increase [18] - **Tenet Healthcare Corporation**: Strong revenue growth driven by its Ambulatory Care and Hospital segments, with projected revenue of $20.9 billion for 2025 [22] - **Universal Health Services**: Growth supported by rising patient days and network expansion, with projected EPS growth of 17% for 2025 [26] - **Community Health Systems**: Benefiting from higher occupancy rates and a growing telehealth focus, with projected EPS growth of 69.9% for 2025 [31]

Group 1 - Universal Health Services, Inc. (UHS) announced a cash dividend of $0.20 per share to be paid on September 16, 2025, to shareholders of record as of September 2, 2025 [1] - UHS is one of the largest providers of hospital and healthcare services in the United States, operating acute care hospitals, behavioral health facilities, outpatient facilities, and ambulatory care access points [2]

Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to associated risks and volatility [1] Group 1: Company Overview - Universal Health Services (UHS) is currently recommended as a growth stock by the Zacks Growth Style Score system, which evaluates a company's real growth prospects beyond traditional metrics [2] - UHS has a favorable Growth Score and a top Zacks Rank, indicating strong potential for growth investors [2][11] Group 2: Earnings Growth - Historical EPS growth for UHS is 7.1%, but projected EPS growth is expected to be 17% this year, surpassing the industry average of 15% [5] Group 3: Asset Utilization - UHS has an asset utilization ratio (sales-to-total-assets ratio) of 1.11, indicating that the company generates $1.11 in sales for every dollar in assets, which is higher than the industry average of 0.9 [7] - The company's sales are projected to grow by 8% this year, compared to the industry average of 3.4% [7] Group 4: Earnings Estimate Revisions - There have been upward revisions in current-year earnings estimates for UHS, with the Zacks Consensus Estimate increasing by 0.1% over the past month [9] Group 5: Investment Potential - UHS has earned a Growth Score of B and carries a Zacks Rank 2 due to positive earnings estimate revisions, suggesting it is a solid choice for growth investors [11]

Core Viewpoint - Universal Health Services (UHS) shows potential for significant upside, with a mean price target of $226.56 indicating a 28% increase from the current price of $176.94 [1] Price Targets - The average price target consists of 16 estimates ranging from a low of $200.00 to a high of $280.00, with a standard deviation of $22.87, suggesting a variability in analyst predictions [2] - The lowest estimate indicates a 13% increase, while the highest suggests a 58.3% upside [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement [9] Analyst Sentiment - Analysts have shown increasing optimism about UHS's earnings prospects, as evidenced by a trend of higher EPS estimate revisions [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 0.1%, with two estimates moving higher and no negative revisions [12] - UHS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - Solely relying on price targets for investment decisions may not be prudent, as empirical research indicates that they often mislead investors [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

Market Overview - The Dow Jones Industrial Average declined by 436.36 points, or 0.98%, closing at 44,023.29, amid rising inflation concerns and mixed earnings from major banks [2] - The Consumer Price Index increased by 0.3% month over month, indicating potential cost impacts from recent tariff policies [1] Value Investing Insights - Current market conditions suggest a renewed focus on value investing, emphasizing companies with strong fundamentals, stable cash flows, and reasonable valuations [2] - The Price to Cash Flow (P/CF) ratio is highlighted as an effective valuation metric, with a lower ratio indicating better value and strong cash generation potential [3][4] Company Performance and Projections - Hudbay Minerals Inc. (HBM) is projected to have sales growth of 9.7% and EPS growth of 43.8% this year, with shares rising 18.9% in the past year [9][14] - CVS Health Corporation (CVS) expects 3.4% sales growth and 12.9% EPS growth, with shares increasing by 3.8% over the past year [9][14] - Universal Health Services, Inc. (UHS) anticipates 8% sales growth and 17% EPS growth, although shares have declined by 3.7% in the past year [16] - Associated Banc-Corp (ASB) forecasts 10.1% sales growth and 5% EPS growth, with shares rising 6.3% in the past year [17] Investment Strategy Parameters - Parameters for selecting true-value stocks include a P/CF less than or equal to the industry median, a minimum stock price of $5, and an average 20-day volume greater than 100,000 [8] - Additional metrics for screening include P/E, P/B, and P/S ratios, with a PEG ratio of less than 1 indicating undervaluation [10][11]

Core Viewpoint - Universal Health Services, Inc. will report its second quarter results for the period ending June 30, 2025, after market close on July 28, 2025, with a conference call scheduled for July 29, 2025, at 10:00 a.m. Eastern time [1] Company Information - Universal Health Services, Inc. is one of the largest hospital companies in the United States, operating through subsidiaries that include acute care hospitals, behavioral health facilities, and ambulatory centers across the United States, the United Kingdom, and Puerto Rico [3]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens [1] Zacks Style Scores - Zacks Style Scores are indicators designed to help investors select stocks with the highest potential to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [2] - The Value Score focuses on identifying undervalued stocks using financial ratios like P/E, PEG, and Price/Sales to find attractive investment opportunities [3] - The Growth Score assesses a company's financial health and future outlook by analyzing projected and historical earnings, sales, and cash flow to identify stocks with sustainable growth potential [4] - The Momentum Score identifies optimal times to invest based on price trends and earnings estimate changes, emphasizing the importance of following market trends [5] - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies [6] Zacks Rank and Style Scores Integration - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to assist investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 that also have Style Scores of A or B, while stocks with a 3 (Hold) rank should also possess high Style Scores to ensure potential upside [9][10] Company Spotlight: Universal Health Services (UHS) - Universal Health Services Inc. operates various healthcare facilities and currently holds a 3 (Hold) rating on the Zacks Rank, with a VGM Score of A and a Momentum Style Score of B, indicating potential for growth [11] - Recent analyst revisions have positively impacted UHS's earnings estimates for fiscal 2025, with the Zacks Consensus Estimate rising by $0.19 to $19.43 per share, alongside an average earnings surprise of 13.8% [12]

Summary of Universal Health Services (UHS) FY Conference Call - June 09, 2025 Company Overview - **Company**: Universal Health Services (UHS) - **Industry**: Healthcare, specifically acute care and behavioral health services Key Points Industry and Market Dynamics - 2024 is viewed as a transition year post-COVID, with 2025 expected to be the first full post-COVID year [2] - Acute care metrics are returning to pre-COVID levels, with mid-single-digit revenue growth projected at around 6% [3] - Adjusted admission growth is expected to be between 2.5% to 3.5%, with pricing growth contributing similarly [3] - The industry is experiencing a catch-up in procedures that were postponed during the pandemic, leading to softer procedural volumes compared to previous years [4] Financial Performance - Revenue growth is described as sustainable, with well-controlled expenses leading to increasing EBITDA and margins [7] - Wage inflation has decelerated, and the use of temporary labor has significantly reduced, contributing to better expense management [6] - The company aims to return acute care margins to pre-pandemic levels within the next 18 to 24 months [32] Operational Insights - Length of stay for patients remains above pre-COVID levels, with opportunities to reduce it further, primarily hindered by challenges in discharging patients to subacute settings [10][12] - The company is actively working on partnerships with subacute providers to improve patient discharge processes [17] Growth and Expansion - UHS is in a period of expansion, adding approximately 300 beds in 2025 and another 300 in 2026, which is expected to contribute to future admissions growth [18][19] - New hospitals typically take 18 to 24 months to ramp up to divisional average performance, with some exceptions in high-demand areas like Las Vegas [20][21] Pricing and Revenue Outlook - Contractual pricing is stable, with annual increases in the 4% to 5% range, although payer behavior regarding denials and nonpayment remains a concern [27][28] - The company anticipates a return to pre-COVID margins of 16% to 16.5% in the acute care segment within the next 18 to 24 months [30] Behavioral Health Segment - The behavioral health business is expected to achieve a volume growth trajectory of 2% to 3%, supported by increasing demand for mental health services [33] - Labor shortages have impacted the ability to meet patient needs, but improvements are anticipated as staffing levels stabilize [34] - The company is expanding its outpatient services to capture a larger share of the growing demand in behavioral health [39] Future Considerations - The company is cautious about the sustainability of high pricing levels in the behavioral health market, anticipating a potential moderation as volumes increase [48] - EBITDA margins in the behavioral segment are currently at the upper end of historical ranges, with room for further expansion if revenue growth continues [52] Regulatory Environment - Ongoing discussions regarding the DPP (Direct Payment Program) and its implications for reimbursement rates are being monitored closely [56][57] Financial Projections - The company estimates a potential impact of $95 million from changes in ACA subsidies, reflecting the uncertainty in the regulatory landscape [59] This summary encapsulates the key insights and projections discussed during the UHS FY Conference Call, highlighting the company's strategic focus on recovery, growth, and operational efficiency in the post-COVID landscape.

Core Viewpoint - Universal Health Services (UHS) shares have increased by approximately 12% over the past month, outperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Estimates Movement - Estimates for Universal Health Services have trended upward over the past month, indicating positive sentiment among analysts [2] VGM Scores - Universal Health Services currently holds a strong Growth Score of A, a Momentum Score of B, and a Value Score of A, placing it in the top 20% for the value investment strategy, resulting in an aggregate VGM Score of A [3] Outlook - The upward trend in estimates suggests a promising outlook for Universal Health Services, which currently has a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4] Industry Performance - Universal Health Services is part of the Zacks Medical - Hospital industry, where HCA Healthcare has gained 11.2% over the past month, reporting revenues of $18.32 billion for the last quarter, reflecting a year-over-year increase of 5.7% [5] - HCA is projected to report earnings of $6.20 per share for the current quarter, representing a year-over-year change of 12.7%, with the Zacks Consensus Estimate remaining unchanged over the last 30 days, also holding a Zacks Rank of 3 (Hold) and a VGM Score of A [6]

Summary of Universal Health Services (UHS) 2025 Conference Call Industry Overview - The discussion primarily revolves around the healthcare services industry, specifically focusing on Medicaid policy changes and their implications for Universal Health Services (UHS) [3][4][5]. Key Points and Arguments 1. **Medicaid Policy Changes**: - The potential negative impacts of the new house bill on Medicaid are perceived to be less severe than initially feared, particularly regarding work requirements aimed at younger, healthier males [3][4]. - The existing direct payment programs (DPP) are expected to face limitations in growth, but UHS anticipates minimal impact on current cash flows from these programs [4][5]. 2. **State-Level Support for DPP**: - States like Florida, Texas, and Mississippi are expected to lobby for the continuation of DPP programs, indicating a strong state-level support that may mitigate deeper cuts [5]. 3. **Tennessee and D.C. Programs**: - The Tennessee Medicaid program is likely to be grandfathered under the new bill, while the D.C. program remains uncertain regarding its approval timeline [6][7]. 4. **Volume and Revenue Growth**: - UHS targets a same-store growth rate of 5-7% for acute care, with expectations of achieving this through a balance of price and volume growth [12][25]. - Behavioral health volumes are expected to ramp up later in the year, with a target of 2.5-3% patient day growth [14][15]. 5. **Pricing Trends in Behavioral Health**: - Strong pricing trends in behavioral health are noted, attributed to limited capacity and labor shortages, allowing UHS to negotiate better rates with payers [17][18]. 6. **Referral Relationships**: - UHS maintains strong referral relationships, which are crucial for sustaining demand in behavioral health despite increased competition [20]. 7. **Bipartisan Support for Behavioral Health**: - There is continued bipartisan support for expanding access to behavioral health care, with a focus on outpatient care [21][22][23]. 8. **Capital Expenditure (CapEx)**: - UHS plans to allocate a significant portion of its $240 million CapEx for new hospital projects, including facilities in Florida and California [31][32]. 9. **Performance of New Facilities**: - The West Henderson hospital achieved EBITDA positivity in its first full quarter, indicating a strong ramp-up compared to typical new hospital performance [35][36]. 10. **Cost Management**: - Professional fees are expected to rise by about 5% due to inflation, with specific pressures noted from emergency room physicians and anesthesiologists [42][43]. Additional Important Content - The impact of tariffs on supply costs appears to be minimal in the short term, with UHS managing supply chain dynamics effectively [27][28]. - Staffing challenges at new facilities are acknowledged, but UHS has experience in managing these dynamics without significant disruption [39][40]. This summary encapsulates the key insights and discussions from the Universal Health Services conference call, highlighting the company's strategic outlook and operational performance within the healthcare services industry.