Tenet Health(US:THC) ZACKSยท2024-07-19 17:55Core Viewpoint - Tenet Healthcare Corporation (THC) is expected to report strong second-quarter earnings, with a consensus estimate of $1.89 per share, reflecting a 31.3% year-over-year growth, despite a slight decline in revenues [1][3]. Financial Performance - The Zacks Consensus Estimate for second-quarter revenues is nearly $5 billion, indicating a 2% decrease from the previous year [1]. - The adjusted patient admissions are projected to grow by 1.3% year-over-year, supported by the resumption of elective procedures [2][9]. - The Ambulatory Care segment is anticipated to show significant growth, with operating revenues expected to rise by 10.1% to 11.7% compared to the prior year [7]. Earnings Expectations - THC has a positive Earnings ESP of +4.11%, with the most accurate estimate at $1.97 per share, suggesting a likely earnings beat [5]. - The company has a strong track record of exceeding earnings estimates, achieving an average beat of 56.5% over the last four quarters [4]. Operational Insights - The average length of stay in hospitals is expected to increase by 3.4%, contributing to higher patient days, which are projected to rise by 5% year-over-year [8][9]. - The consensus estimate for net patient revenues per adjusted admission indicates nearly 6% growth year-over-year [8]. Strategic Direction - Tenet Healthcare is focusing on divesting non-core businesses and reallocating capital to high-margin operations, particularly in acute surgery and the Ambulatory Care segment [18][21]. - The company is actively acquiring assets to enhance profitability and is well-positioned to benefit from an aging population and increasing admissions [18][21]. Market Performance - THC's stock has increased by 74.3% year-to-date, significantly outperforming the industry average of 19.6% and the S&P 500's 15% growth [16]. - The current valuation of THC is slightly above the industry average, trading at 15.04X forward 12-month earnings compared to the industry's 14.51X [17].