Tenet Healthcare (THC) AI Stock Analysis

• Market Cap: $11.78B
• Dividend Yield: N/A
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 3.8
• Beta (1Y): 1.12
• Revenue Growth: -1.79%
• EPS Growth: -41.85%
• Country: US
• Employees: 74,480
• Sector: Healthcare
• Sector Strength: 70
• Industry: Medical - Care Facilities
• EPS (TTM): 3.44
• Shares Outstanding: 95,121,000
• 10 Day Avg. Volume: 1,690,254
• 30 Day Avg. Volume: 1,688,383
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.57
• Price to Cash Flow (P/CF): -8.90
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.36
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.34
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $175.27
• Price Target Upside: 22.61% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

Tenet Healthcare demonstrates strong financial performance and technical momentum, with an attractive valuation. Key strengths include robust EBITDA growth and strategic capital management. However, the company must address revenue growth challenges and policy uncertainties to sustain this performance.

Positive Factors

Financial Performance

Better Ambulatory segment revs and much better Hospital margins drove the beat.

Revenue Growth

Same store admissions showed strong growth, and THC has been expanding capacity to meet demand, aiding profitability.

Strategic Positioning

Tenet's leadership position in ASC puts the company in prime position to capture tailwinds from the shift in healthcare to outpatient settings.

Negative Factors

Policy and Spending Cuts

Uncertainty around potential changes in healthcare policy and government spending cuts are weighing on the stock.

Regulatory Uncertainty

Investors are concerned with the uncertainty surrounding healthcare regulations which could reduce earnings power.

Tenet Healthcare Business Overview & Revenue Model

Company Description

Tenet Healthcare Corporation operates as a diversified healthcare services company. The company operates in three segments: Hospital Operations and Other, Ambulatory Care, and Conifer. Its general hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies. The company also provides intensive and critical care, and coronary care units; cardiovascular, digestive disease, neurosciences, musculoskeletal, and obstetrics services; outpatient services, including physical therapy; cardiothoracic surgery, complex spinal surgery, neonatal intensive care, and neurosurgery services; quaternary care services in heart and kidney transplants; and limb-salvaging vascular procedure, acute level 1 trauma, intravascular stroke care, minimally invasive cardiac valve replacement, imaging, and telemedicine access services. In addition, it operates ambulatory surgery and urgent care centers, imaging centers, surgical hospitals, off-campus emergency departments, and micro-hospitals; and offers healthcare business process services in the areas of hospital and physician revenue cycle management, patient communications and engagement support, and value-based care solutions to hospitals, health systems, physician practices, employers, and other customers. As of February 09, 2022, the company operated 60 hospitals; and approximately 550 other healthcare facilities, including surgical hospitals, ambulatory surgery centers, urgent care and imaging centers, and other care sites and clinics. Tenet Healthcare Corporation was incorporated in 1975 and is headquartered in Dallas, Texas.

How the Company Makes Money

Tenet Healthcare generates revenue through a combination of patient service revenues from its network of hospitals and outpatient centers, management fees from its surgical facilities, and business solutions services. The company earns income from providing medical services, surgeries, and treatments in its hospitals and ambulatory centers, and it receives payments from patients, insurance companies, and government programs such as Medicare and Medicaid. Tenet's subsidiary, USPI, contributes to earnings by managing surgical facilities, where it charges management fees and shares profits from joint venture partnerships with physicians and health systems. Additionally, Conifer Health Solutions provides revenue cycle management and value-based care services to healthcare providers, generating further revenue streams.

Tenet Healthcare Financial Statement Overview

Summary

Tenet Healthcare shows robust financial health with strong revenue growth, improved profitability, and effective debt management. While there are fluctuations in EBITDA margins and free cash flow ratios, the focus on reducing debt and enhancing equity positions is favorable.

Income Statement

Tenet Healthcare has shown a strong revenue growth trend, with revenues increasing from $17.64 billion in 2020 to $20.67 billion in 2024. The gross profit margin is solid, indicating good cost management, while the net profit margin shows a significant improvement in 2024, highlighting enhanced profitability. The EBIT margin also reflects strong operational efficiency. However, EBITDA margin saw a decrease, pointing to potential challenges in maintaining consistent earnings before interest, taxes, depreciation, and amortization.

Balance Sheet

The balance sheet indicates a substantial reduction in total debt by 2024, improving the debt-to-equity ratio significantly. The return on equity (ROE) has improved, demonstrating effective utilization of shareholder's equity to generate profits. The equity ratio is still low, suggesting a higher reliance on liabilities but has improved over the years, indicating a positive trend towards strengthening equity.

Cash Flow

Tenet Healthcare's cash flow from operations has been consistently positive, with a solid free cash flow growth in recent years. The operating cash flow to net income ratio is healthy, showcasing efficient cash generation relative to net income. However, free cash flow to net income ratio indicates some variability, suggesting potential challenges in maintaining consistent free cash flow relative to net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
20.66B	20.55B	19.17B	19.48B	17.64B
	Gross Profit
11.86B	16.96B	15.90B	16.16B	14.66B
	EBIT
5.96B	2.51B	2.33B	2.87B	1.99B
	EBITDA
6.89B	3.39B	3.33B	3.42B	2.43B
	Net Income Common Stockholders
3.20B	611.00M	1.00B	1.48B	768.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.02B	1.23B	858.00M	2.36B	2.45B
	Total Assets
28.94B	28.31B	27.16B	27.58B	27.11B
	Total Debt
92.00M	16.21B	15.08B	15.65B	15.72B
	Net Debt
-2.93B	14.98B	14.22B	13.28B	13.27B
	Total Liabilities
20.39B	22.80B	22.55B	23.32B	24.22B
	Stockholders Equity
4.17B	1.61B	1.14B	1.03B	28.00M
Cash Flow		Free Cash Flow
1.12B	1.62B	321.00M	910.00M	2.87B
	Operating Cash Flow
2.05B	2.37B	1.08B	1.57B	3.41B
	Investing Cash Flow
3.43B	-969.00M	-808.00M	-714.00M	-1.61B
	Financing Cash Flow
-3.69B	-1.03B	-1.78B	-936.00M	385.00M

Tenet Healthcare Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 142.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For THC, the sentiment is Positive. The current price of 142.95 is above the 20-day moving average (MA) of 124.89, above the 50-day MA of 127.13, and above the 200-day MA of 142.67, indicating a bullish trend. The MACD of 0.91 indicates Negative momentum. The RSI at 64.42 is Neutral, neither overbought nor oversold. The STOCH value of 92.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for THC.

Tenet Healthcare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THC	78 Outperform	$11.78B	3.84	38.12%	―	-1.79%	-41.85%
UHS	76 Outperform	$11.43B	10.43	18.35%	0.47%	9.73%	51.87%
FMS	72 Outperform	$14.66B	25.28	3.87%	1.77%	-0.57%	8.25%
EHC	70 Outperform	$11.81B	24.17	25.35%	0.55%	11.21%	30.49%
HCA	67 Neutral	$83.86B	15.48	-230.22%	0.79%	7.30%	―
DVA	64 Neutral	$10.88B	13.17	159.08%	―	5.56%	45.02%
Sector *	52 Neutral	$5.38B	3.59	-41.63%	2.87%	17.72%	1.87%

Tenet Healthcare Corporate Events

Tenet Healthcare Updates CEO Compensation Agreement

On January 23, 2025, Tenet Healthcare Corporation entered into an amended employment agreement with its CEO, Saumya Sutaria. The agreement outlines his compensation, including a base salary of $1.5 million and an annual incentive plan, as well as stock incentives valued at $18 million. The contract includes provisions for termination benefits and performance-based vesting of stock units, impacting the company’s leadership stability and aligning executive interests with long-term performance goals.