HCA Healthcare (HCA) AI Stock Analysis

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HCA Healthcare

(NYSE:HCA)

Rating:72Outperform

Price Target:―

HCA Healthcare receives a strong overall score of 72, driven by robust financial performance and a positive earnings call. The company's revenue growth, operational efficiency, and positive cash flow are strengths, while high leverage remains a notable risk. Technical indicators suggest moderate momentum, and valuation metrics are reasonable, supporting the overall positive outlook.

Positive Factors

Earnings

HCA reported a +6% adj EBITDA beat vs consensus, with overall volume relatively in line and tight labor management.

Financial Performance

HCA continues to generate strong free cash flow and is deploying capital toward an aggressive $10 billion share buyback.

Stock Buyback

HCA completed $2.5 billion of share repurchases and anticipates completing a significant portion of the $10 billion authorization.

Negative Factors

Healthcare Policy

Management noted the very fluid healthcare policy environment and said it was too early to size the potential impacts of health policy and tariffs risks.

Market Reaction

The negative response (-3.9% vs. S&P 500 +0.7% and Health Care S&P 500 +0.5%) to a strong report was discouraging.

Valuation

A higher bar was set ahead of earnings for HCA following the stock’s significant outperformance and valuation multiple that was ~10% above the long-term medium.

HCA Healthcare (HCA) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$92.87B

Dividend Yield0.71%

Average Volume (3M)1.64M

Price to Earnings (P/E)17.2

Beta (1Y)0.55

Revenue Growth7.30%

EPS Growth11.60%

CountryUS

Employees226,000

SectorHealthcare

Sector Strength43

IndustryMedical - Care Facilities

Share Statistics

EPS (TTM)6.45

Shares Outstanding240,573,900

10 Day Avg. Volume1,724,363

30 Day Avg. Volume1,644,102

Financial Highlights & Ratios

PEG Ratio8.23

Price to Book (P/B)-25.07

Price to Sales (P/S)0.00

P/FCF Ratio17.20

Enterprise Value/Market Cap1.40

Enterprise Value/Revenue0.47

Enterprise Value/Gross Profit2.68

Enterprise Value/Ebitda2.35

Forecast

1Y Price Target

$381.30

Price Target Upside1.24% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering12

HCA Healthcare Business Overview & Revenue Model

Company DescriptionHCA Healthcare, Inc., through its subsidiaries, provides health care services company in the United States. The company operates general and acute care hospitals that offers medical and surgical services, including inpatient care, intensive care, cardiac care, diagnostic, and emergency services; and outpatient services, such as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology, and physical therapy. It also operates outpatient health care facilities consisting of freestanding ambulatory surgery centers, freestanding emergency care facilities, urgent care facilities, walk-in clinics, diagnostic and imaging centers, rehabilitation and physical therapy centers, radiation and oncology therapy centers, physician practices, and various other facilities. In addition, the company operates psychiatric hospitals, which provide therapeutic programs comprising child, adolescent and adult psychiatric care, adolescent and adult alcohol, drug abuse treatment, and counseling services. As of December 31, 2021, it operated 182 hospitals, including 175 general and acute care hospitals, five psychiatric hospitals, and two rehabilitation hospitals; 125 freestanding surgery centers; and 21 freestanding endoscopy centers in 20 states and England. The company was formerly known as HCA Holdings, Inc. HCA Healthcare, Inc. was founded in 1968 and is headquartered in Nashville, Tennessee.

How the Company Makes MoneyHCA Healthcare generates revenue primarily through patient services, making money from a diversified stream of healthcare operations. The company earns income by providing medical treatments, surgeries, diagnostic services, and other healthcare-related services to patients. A significant portion of its revenue comes from hospital inpatient care, outpatient services, and emergency room visits. HCA Healthcare also receives payments from insurance companies, government healthcare programs like Medicare and Medicaid, and directly from patients. Additionally, the company benefits from strategic partnerships with medical technology firms, pharmaceutical companies, and various healthcare providers, which help expand its service offerings and improve operational efficiency. These partnerships and collaborations enhance HCA's ability to deliver integrated healthcare solutions, thereby contributing to its financial growth.

HCA Healthcare Key Performance Indicators (KPIs)

Any

Adjusted EBITDA by Segment

Adjusted EBITDA by Segment
Reveals profitability across different business units, highlighting which segments drive earnings and where there might be opportunities or challenges in cost management.

Chart InsightsHCA Healthcare's Adjusted EBITDA shows a strong upward trend across all segments, particularly in the American and Atlantic Groups, reflecting the company's effective cost management and operational expansion. The earnings call highlights robust growth in managed care and exchange admissions, contributing to a 11.3% increase in adjusted EBITDA. Despite challenges in surgical volumes and potential federal policy risks, HCA's strategic expansion and improved operating margins underscore its resilience and growth potential, making it a compelling investment consideration.

Data provided by:

Main Street Data

HCA Healthcare Financial Statement Overview

Summary

HCA Healthcare demonstrates strong revenue growth and operational efficiency, as reflected in a healthy income statement and robust cash flow. However, the balance sheet reveals high leverage due to negative stockholders' equity, posing significant financial risk and necessitating careful debt management.

Income Statement

Positive

HCA Healthcare has demonstrated steady revenue growth over the past few years, with a notable increase from 2022 to 2023. The gross profit margin remains robust, indicating effective cost management. Net profit margin and EBIT margins have been consistent, although there was a slight dip in net income. The EBITDA margin indicates strong operational efficiency. Overall, the income statement reflects a healthy financial trajectory, although potential risks include slight fluctuations in net income.

Balance Sheet

Neutral

The company's balance sheet reveals a high debt-to-equity ratio due to negative stockholders' equity, which poses a significant financial risk, as it indicates a reliance on debt financing. However, the company maintains substantial total assets. Return on equity is not applicable due to negative equity, but total liabilities as a percentage of total assets have been stable. The balance sheet reflects adequate asset management with risks associated with leverage.

Cash Flow

Positive

HCA Healthcare's cash flow analysis shows positive free cash flow growth, despite fluctuations in capital expenditures. The operating cash flow to net income ratio has been strong, underscoring efficient cash generation from operations. However, free cash flow to net income ratio declined recently, which could indicate increased investment activities. Overall, the company exhibits strong cash flow management, supporting its operations and investments.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
71.58B	70.60B	64.97B	60.23B	58.75B	51.53B
	Gross Profit
48.61B	28.68B	9.63B	50.86B	49.27B	43.16B
	EBIT
10.84B	10.55B	9.63B	9.10B	9.79B	7.32B
	EBITDA
14.06B	13.90B	12.72B	13.29B	14.25B	9.73B
	Net Income Common Stockholders
5.78B	5.76B	5.24B	5.64B	6.96B	3.75B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.06B	1.93B	1.02B	908.00M	1.45B	1.79B
	Total Assets
59.80B	59.51B	56.21B	52.44B	50.74B	47.49B
	Total Debt
46.44B	45.24B	41.86B	39.84B	36.33B	32.68B
	Net Debt
45.38B	43.30B	40.92B	38.93B	34.88B	30.88B
	Total Liabilities
60.24B	58.96B	55.15B	52.51B	49.25B	44.60B
	Stockholders Equity
-3.52B	-2.50B	-1.77B	-2.77B	-933.00M	572.00M
Cash Flow		Free Cash Flow
4.95B	5.64B	4.69B	4.13B	5.38B	6.40B
	Operating Cash Flow
9.70B	10.51B	9.43B	8.52B	8.96B	9.23B
	Investing Cash Flow
-5.06B	-4.93B	-5.32B	-3.39B	-2.64B	-3.39B
	Financing Cash Flow
-4.86B	-4.58B	-4.09B	-5.66B	-6.66B	-4.68B

HCA Healthcare Technical Analysis

Technical Analysis Sentiment

Positive

Last Price376.64

Price Trends

50DMA

344.88

Positive

100DMA

330.80

Positive

200DMA

347.31

Positive

Market Momentum

MACD

12.38

Negative

RSI

62.69

Neutral

STOCH

80.12

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCA, the sentiment is Positive. The current price of 376.64 is above the 20-day moving average (MA) of 360.73, above the 50-day MA of 344.88, and above the 200-day MA of 347.31, indicating a bullish trend. The MACD of 12.38 indicates Negative momentum. The RSI at 62.69 is Neutral, neither overbought nor oversold. The STOCH value of 80.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HCA.

HCA Healthcare Risk Analysis

HCA Healthcare disclosed 31 risk factors in its most recent earnings report. HCA Healthcare reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

HCA Healthcare Peers Comparison

Overall Rating

UnderperformOutperform

Sector (53)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THC	78 Outperform	$15.67B	10.77	38.12%	―	-1.79%	-41.85%
CNC	77 Outperform	$30.83B	9.04	12.59%	―	8.85%	33.30%
MOH	76 Outperform	$17.68B	15.44	26.72%	―	16.71%	12.23%
UHS	73 Outperform	$12.03B	10.48	18.35%	0.42%	9.73%	51.87%
HCA	72 Outperform	$92.87B	17.15	-230.22%	0.71%	7.30%	11.60%
HUM	67 Neutral	$30.81B	18.05	10.09%	1.44%	10.09%	-12.18%
Sector *	53 Neutral	$5.14B	3.06	-43.57%	2.81%	16.81%	-0.12%

* Healthcare Sector Average

Performance Comparison

HCA

HCA Healthcare

376.64

60.48

19.13%

CNC

Centene

58.07

-16.56

-22.19%

HUM

Humana

227.14

-118.00

-34.19%

MOH

Molina Healthcare

309.77

-22.36

-6.73%

THC

Tenet Healthcare

161.33

30.20

23.03%

UHS

Universal Health

186.65

10.99

6.26%

HCA Healthcare Earnings Call Summary

Earnings Call Date:Apr 25, 2025

(Q1-2025)

% Change Since: 10.32%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance with significant growth in earnings per share and adjusted EBITDA. There was broad-based volume growth, particularly in managed care and exchange admissions, and an improved operating margin. However, challenges remain in surgical volumes and potential impacts from federal policy risks and state supplemental payments. Overall, the positive achievements outweighed the concerns.

Q1-2025 Updates

Positive Updates

Strong Financial Performance

Diluted earnings per share, as adjusted, increased more than 20% in the first quarter to $6.45. Adjusted EBITDA grew 11.3% over the prior year quarter.

Broad-Based Volume Growth

Inpatient admissions grew 2.6% year-over-year, equivalent admissions grew 2.8%, and emergency room visits increased 4%. Same facilities revenue grew almost 6%.

Improved Operating Margin

Operating margin improved on a year-over-year basis, driven by strong expense management and operating leverage from volume growth.

Managed Care and Exchange Admissions Growth

Same-facility managed care equivalent admissions increased 5.4%, and same-facility equivalent exchange admissions increased 22.4% over the prior year quarter.

Capital Expansion

Capital spending increased the number of facilities by 3.3% and inpatient bed capacity by approximately 2%.

Negative Updates

Surgical Volume Challenges

Surgical volumes were mixed, with inpatient surgeries slightly up, but outpatient cases down, driven by lower acuity cases and Medicaid and self-health payer mix.

Potential Federal Policy Risks

Uncertainty around federal policy environment and potential impacts on business, with no specific estimates provided due to lack of details.

Dependence on State Supplemental Payments

There is a potential range of $50 million better to a $200 million decline in state supplemental payments, with uncertainty around approval for Tennessee program.

Contract Labor Costs

Contract labor costs, although improved, still represent 4.4% of total labor costs in the first quarter of 2025.

Company Guidance

During HCA Healthcare's First Quarter 2025 Earnings Conference Call, the company provided a robust set of financial and operational metrics that highlighted a strong start to the fiscal year. Diluted earnings per share increased by over 20% to $6.45 compared to the prior year. The company experienced volume growth with inpatient admissions up 2.6%, equivalent admissions up 2.8%, and emergency room visits up 4%. Revenue per equivalent admission increased by approximately 3%, contributing to a nearly 6% rise in same-facility revenue. The operating margin improved year-over-year, driven by strong cost management, with adjusted EBITDA growing by 11.3%. Additionally, HCA expanded its facility network by 3.3% and increased inpatient bed capacity by approximately 2%, achieving an inpatient occupancy rate of 77%. Despite fluctuations in surgical volumes, the company reaffirmed its guidance for the full year. The payer mix remained strong, with managed care equivalent admissions growing 5.4% and exchange admissions up 22.4%. The company also reported that contract labor costs decreased, representing 4.4% of total labor costs compared to 5.1% last year, as part of its ongoing efforts to optimize labor expenses.

HCA Healthcare Corporate Events

Executive/Board ChangesShareholder Meetings

HCA Healthcare Approves New Compensation Program

Neutral

Apr 29, 2025

On April 24, 2025, HCA Healthcare‘s Board of Directors approved the 2025-2026 compensation program for non-management directors, which includes cash retainers and equity awards. The company also held its Annual Meeting on the same day, where key decisions were made, including the election of directors, approval of amendments to the stock incentive plan, and ratification of Ernst & Young LLP as the accounting firm. Stockholder proposals on golden parachutes and acquisition strategy were not approved.

Stock BuybackDividendsFinancial Disclosures

HCA Healthcare Q1 2025 Financial Results Announced

Positive

Apr 25, 2025

On April 25, 2025, HCA Healthcare announced its financial results for the first quarter of 2025, reporting revenues of $18.321 billion and a net income of $1.610 billion. The company declared a quarterly cash dividend of $0.72 per share, payable on June 30, 2025. The results showed a growth in same facility admissions and emergency room visits, although outpatient surgeries declined. HCA Healthcare also repurchased 7.762 million shares of its common stock during the quarter. The company reaffirmed its 2025 guidance, indicating confidence in its performance and the growing demand for healthcare services.

Executive/Board ChangesBusiness Operations and Strategy

HCA Healthcare Launches 2025 Executive Performance Program

Neutral

Feb 24, 2025

On February 18, 2025, HCA Healthcare’s Board of Directors adopted the 2025 Executive Officer Performance Excellence Program, which offers performance awards to executive officers based on EBITDA and quality metrics. The program aims to incentivize executives to meet specific financial and quality targets, with awards paid in cash. Additionally, Meg G. Crofton announced her retirement from the Board of Directors, effective April 24, 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.