Universal Health Services, Inc. (UHS) Hits Fresh High: Is There Still Room to Run?

Company Performance - Universal Health Services (UHS) shares have increased by 19.9% over the past month, reaching a new 52-week high of $221.66 [1] - The stock has gained 44.6% since the beginning of the year, outperforming the Zacks Medical sector's 8.2% and the Zacks Medical - Hospital industry's 37.5% [1] Earnings and Revenue - UHS has a strong record of positive earnings surprises, not missing earnings consensus estimates in the last four quarters [2] - In the latest earnings report on July 24, 2024, UHS reported EPS of $4.31, exceeding the consensus estimate of $3.37 [2] - For the current fiscal year, UHS is expected to post earnings of $15.61 per share on revenues of $15.66 billion, reflecting a 48.1% change in EPS and a 9.67% change in revenues [3] - For the next fiscal year, earnings are projected at $17.09 per share on revenues of $16.52 billion, indicating year-over-year changes of 9.49% and 5.47%, respectively [3] Valuation Metrics - UHS currently trades at 14.1X current fiscal year EPS estimates, below the peer industry average of 15.8X [7] - On a trailing cash flow basis, UHS trades at 11.3X compared to the peer group's average of 11.6X [7] - The stock has a PEG ratio of 0.74, which does not place it among the top echelon of stocks from a value perspective [7] Zacks Rank and Style Scores - UHS holds a Zacks Rank of 1 (Strong Buy) due to favorable earnings estimate revisions from analysts [8] - The stock has a Value Score of A, a Growth Score of A, and a Momentum Score of C, resulting in a combined VGM Score of A [6] Industry Comparison - Tenet Healthcare Corporation (THC) is a notable peer with a Zacks Rank of 1 (Strong Buy) and a Value Score of A, indicating strong performance within the industry [10] - THC is expected to post earnings of $10.44 per share on revenues of $20.84 billion for the current fiscal year, having beaten consensus estimates by 22.22% last quarter [11] - The Medical - Hospital industry is in the top 2% of all industries, suggesting favorable conditions for both UHS and THC [12]