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Tenet Healthcare (THC)
NYSE:THC

Tenet Healthcare (THC) AI Stock Analysis

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Tenet Healthcare

(NYSE:THC)

Rating:71Outperform
Price Target:
$190.00
▲(10.32%Upside)
Tenet Healthcare's strong operational efficiency and profitability metrics are the primary drivers of its stock score. The positive earnings momentum and strategic corporate events further bolster the score, despite valuation concerns and policy uncertainties posing potential risks.
Positive Factors
Partnerships
USPI’s ability to get strong pricing and low costs on supplies, coupled with its national support infrastructure make it a compelling partner for physicians who want to be part of an ASC.
Strategic Goals
The company remains steadfast in achieving its strategic goals of growth, capital deployment, cost control and expanding the ASC business despite policy and macro uncertainties.
Negative Factors
Medicaid Cuts
The cuts to Medicaid appear to be tracking in line with a softer landing thesis with perhaps further moderation to come when the Senate gets done with the bill.
Policy Uncertainty
Despite anticipated growth in supplies and other OpEx expenses, there is an acknowledgment of the possibility of recession fears altering consumer consumption dynamics.

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

Tenet Healthcare Business Overview & Revenue Model

Company DescriptionTenet 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 MoneyTenet Healthcare generates revenue primarily through patient services provided at its hospitals, outpatient centers, and urgent care facilities. The company earns money from patient admissions, surgeries, diagnostic services, and other medical procedures. A significant portion of its revenue comes from agreements with private insurance companies, government health programs like Medicare and Medicaid, and direct payments from patients. Additionally, Tenet's subsidiary, United Surgical Partners International, contributes to its earnings by operating surgical facilities in partnership with physicians. Conifer Health Solutions, another key subsidiary, provides revenue cycle management and value-based care services, further enhancing the company's financial performance. Strategic partnerships and acquisitions also play a crucial role in expanding Tenet's service offerings and market presence, driving revenue growth.

Tenet Healthcare Key Performance Indicators (KPIs)

Any
Any
Total Hospitals
Total Hospitals
Indicates the number of hospitals operated, reflecting the scale of operations and market presence. A larger network can drive higher revenue and provide competitive advantages in negotiating with insurers and suppliers.
Chart InsightsTenet Healthcare's total number of hospitals has decreased significantly since 2020, with a notable drop in 2024. Despite this reduction, the company has reported strong financial performance in early 2025, with robust revenue and EBITDA growth. The strategic focus on ambulatory space M&A and operational excellence is likely compensating for the reduced hospital count. However, uncertainties in healthcare policy, particularly around Medicaid, could pose challenges. The company's cautious approach to 2025 guidance reflects these uncertainties, despite a promising start to the fiscal year.
Data provided by:Main Street Data

Tenet Healthcare Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 38.99%|
Next Earnings Date:Jul 22, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with significant growth in revenue, EBITDA, and improved margins across segments. The company's strategic investments and capital management were emphasized, but there was caution due to healthcare policy uncertainties. Overall, the positive aspects of financial performance outweighed the cautious outlook related to policy uncertainties.
Q1-2025 Updates
Positive Updates
Strong Revenue and EBITDA Growth
First quarter 2025 net operating revenues were $5.2 billion with consolidated adjusted EBITDA of $1.163 billion, representing a 14% growth over 2024.
Improved EBITDA Margins
Adjusted EBITDA margin improved by 320 basis points to 22.3% in the first quarter of 2025.
USPI Segment Performance
USPI delivered $56 million in adjusted EBITDA, a 16% growth, with a 6.8% increase in same facility system-wide revenues.
Hospital Segment Growth
Adjusted EBITDA for the hospital segment grew 12% to $707 million, with same store hospital admissions up 4.4% and revenue per adjusted admission up 2.8%.
Capital Deployment and Balance Sheet Management
Net debt to EBITDA minus NCI ratio was 3.1, with plans to invest $250 million annually in ambulatory M&A and a $348 million share repurchase.
Significant Free Cash Flow Generation
Generated $642 million of free cash flow in the first quarter, with $3 billion in cash on hand and no significant debt maturities until 2027.
Negative Updates
Uncertainty in Healthcare Policy
The company acknowledged uncertainty in healthcare policy, particularly around Medicaid, which might impact future performance.
Conservative 2025 Guidance Approach
Despite strong first-quarter performance, the company chose not to update its 2025 guidance due to it being early in the fiscal year.
Challenges in Managed Care Contracting Environment
Potential challenges in managed care contracting due to healthcare policy uncertainties and macroeconomic factors.
Company Guidance
During the first quarter of 2025, Tenet Healthcare Corporation reported robust financial performance with net operating revenues of $5.2 billion and a consolidated adjusted EBITDA of $1.163 billion, marking a 14% growth compared to the previous year. The company achieved an adjusted EBITDA margin of 22.3%, representing a 320 basis point improvement over the prior year. Notably, USPI's adjusted EBITDA increased by 16% to $56 million, and the hospital segment's adjusted EBITDA rose by 12% to $707 million, with same-store hospital admissions up by 4.4%. Despite this strong start, Tenet did not adjust its full-year guidance, acknowledging the early stage of the fiscal year. The company highlighted its strategic focus on capital deployment, including a $250 million annual investment in ambulatory space M&A and the addition of six new centers. Furthermore, Tenet repurchased 2.6 million shares for $348 million, maintaining a net debt to EBITDA minus NCI ratio of 3.1 as of March 31, 2025. The company emphasized its commitment to growth, operational excellence, and managing healthcare policy uncertainties while enhancing shareholder value through effective capital allocation.

Tenet Healthcare Financial Statement Overview

Summary
Tenet Healthcare exhibits strong operational efficiency and cash flow management, with impressive profitability metrics and a significantly improved debt position. However, the company must continue focusing on revenue growth and expanding its equity base to mitigate risks associated with a relatively high liability level.
Income Statement
76
Positive
Tenet Healthcare shows strong profitability with a consistent gross profit margin of around 47.3% TTM. The net profit margin has seen fluctuations but stands at a healthy 8.1% TTM. Revenue growth is stable with a slight decrease in the latest TTM compared to the previous year. The company maintains robust EBIT and EBITDA margins at 17.2% and 18.3% respectively, indicating efficient operations. However, the recent decline in net income and revenue growth could pose concerns if not addressed.
Balance Sheet
68
Positive
The company's balance sheet reveals a solid equity ratio of 14.3% TTM, showing a reasonable level of financial stability. The debt-to-equity ratio has improved significantly, dropping to 0.02, reflecting effective debt management. Return on equity is impressive at 40%, indicating strong profitability relative to shareholder equity. However, the overall equity base remains relatively small compared to total liabilities, which could pose risks during financial downturns.
Cash Flow
72
Positive
Cash flow analysis indicates a strong free cash flow growth rate of 27.4% TTM, highlighting improved cash generation capabilities. The operating cash flow to net income ratio is robust at 1.36, demonstrating efficient cash flow management. The free cash flow to net income ratio is also solid at 0.85, suggesting effective use of cash. Despite this, the company must maintain its focus on sustaining cash flow growth amid fluctuating net income levels.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue20.52B20.66B20.55B19.17B19.48B17.64B
Gross Profit9.71B11.86B16.96B15.90B16.16B14.66B
EBITDA4.44B6.89B3.39B3.33B3.42B2.43B
Net Income1.46B3.20B611.00M1.00B1.48B768.00M
Balance Sheet
Total Assets29.24B28.94B28.31B27.16B27.58B27.11B
Cash, Cash Equivalents and Short-Term Investments3.00B3.02B1.23B858.00M2.36B2.45B
Total Debt13.17B13.17B16.21B15.08B15.65B15.72B
Total Liabilities20.58B20.39B22.80B22.55B23.32B24.22B
Stockholders Equity4.18B4.17B1.61B1.14B1.03B28.00M
Cash Flow
Free Cash Flow1.42B1.12B1.62B321.00M910.00M2.87B
Operating Cash Flow2.28B2.05B2.37B1.08B1.57B3.41B
Investing Cash Flow-117.00M3.43B-969.00M-808.00M-714.00M-1.61B
Financing Cash Flow-1.64B-3.69B-1.03B-1.78B-936.00M385.00M

Tenet Healthcare Technical Analysis

Technical Analysis Sentiment
Positive
Last Price172.22
Price Trends
50DMA
158.77
Positive
100DMA
143.55
Positive
200DMA
145.37
Positive
Market Momentum
MACD
4.11
Negative
RSI
57.90
Neutral
STOCH
78.75
Neutral
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 172.22 is above the 20-day moving average (MA) of 168.80, above the 50-day MA of 158.77, and above the 200-day MA of 145.37, indicating a bullish trend. The MACD of 4.11 indicates Negative momentum. The RSI at 57.90 is Neutral, neither overbought nor oversold. The STOCH value of 78.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for THC.

Tenet Healthcare Risk Analysis

Tenet Healthcare disclosed 25 risk factors in its most recent earnings report. Tenet Healthcare reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Tenet Healthcare Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
UHUHS
77
Outperform
$12.17B10.6118.35%0.42%9.73%51.87%
FMFMS
77
Outperform
$16.90B25.024.36%2.73%-0.91%27.17%
HCHCA
76
Outperform
$93.71B17.31-230.22%0.74%7.30%11.60%
EHEHC
75
Outperform
$12.14B24.8625.33%0.56%11.21%30.38%
THTHC
71
Outperform
$16.48B11.3938.12%-1.79%-41.85%
DVDVA
66
Neutral
$11.08B14.11260.92%5.11%14.28%
51
Neutral
$7.55B0.30-61.90%2.27%17.11%1.58%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
THC
Tenet Healthcare
172.22
40.42
30.67%
DVA
DaVita
142.56
6.11
4.48%
FMS
Fresenius Medical Care
28.32
9.02
46.74%
HCA
HCA Healthcare
378.04
60.29
18.97%
EHC
Encompass Health
118.88
34.20
40.39%
UHS
Universal Health
184.47
4.27
2.37%

Tenet Healthcare Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Tenet Healthcare Appoints Lisa Y. Foo as COO
Positive
Jun 5, 2025

On May 30, 2025, Tenet Healthcare Corporation announced the promotion of Lisa Y. Foo to the newly created position of Chief Operating Officer, effective immediately. This strategic move is expected to enhance the company’s operational leadership and potentially strengthen its market position.

The most recent analyst rating on (THC) stock is a Buy with a $136.00 price target. To see the full list of analyst forecasts on Tenet Healthcare stock, see the THC Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Tenet Healthcare Holds Annual Shareholder Meeting
Neutral
May 27, 2025

On May 22, 2025, Tenet Healthcare Corporation held its Annual Meeting of Shareholders, where several key decisions were made. Shareholders elected directors to the board, approved executive compensation, and ratified Deloitte & Touche LLP as the independent accountants for 2025. However, a proposal for a report on improving maternal health outcomes was not approved, indicating a lack of consensus on this issue among shareholders.

The most recent analyst rating on (THC) stock is a Buy with a $184.00 price target. To see the full list of analyst forecasts on Tenet Healthcare stock, see the THC Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 06, 2025