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Universal Health (UHS)
NYSE:UHS
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Universal Health
(NYSE:UHS)74Outperform
Positive Factors
Earnings
UHS beat nicely and issued guide that’s slightly above consensus.
Revenue Growth
UHS expects SS revenue growth of +5-6% in the Acute segment and +6-8% in the BH segment.
Negative Factors
Policy Risks
The incoming administration and market sentiment add risk to the stock pick and there is potential for revisions to entitlement programs and other headwinds.
Universal Health (UHS) vs. S&P 500 (SPY)
Market Cap
$11.39B
Dividend Yield0.46%
Average Volume (3M)696.62K
Price to Earnings (P/E)10.4
Beta (1Y)0.88
Revenue Growth10.82%
EPS Growth65.64%
CountryUS
Employees96,700
SectorHealthcare
Sector Strength74
IndustryHealthcare Providers & Services
Share Statistics
EPS (TTM)16.83
Shares Outstanding57,751,198
10 Day Avg. Volume1,102,972
30 Day Avg. Volume696,621
Financial Highlights & Ratios
PEG Ratio0.16
Price to Book (P/B)N/A
Price to Sales (P/S)0.72
Price to Cash Flow (P/CF)4.30
P/FCF Ratio6.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$231.22Price Target Upside33.42% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Universal Health Business Overview & Revenue Model
Company DescriptionUniversal Health Services, Inc. (UHS) is a leading American healthcare management company that operates acute care hospitals, behavioral health facilities, and ambulatory centers. Founded in 1979, the company provides high-quality healthcare services through a robust network of facilities spread across the United States and the United Kingdom, focusing on delivering superior patient care and improving health outcomes.
How the Company Makes MoneyUHS generates revenue primarily through the operation of its acute care hospitals and behavioral health facilities. The company earns income from patient services, including inpatient and outpatient care, emergency room visits, and specialized medical services. Revenue is also generated through partnerships with insurance companies, government programs like Medicare and Medicaid, and direct patient payments. Additionally, UHS benefits from strategic acquisitions and expansions, which increase its service offerings and patient base, thereby enhancing profitability. Key factors contributing to earnings include efficient facility management, cost controls, and the ability to attract and retain skilled healthcare professionals.
Universal Health Financial Statement Overview
Summary
Universal Health exhibits strong financial health with consistent revenue and profit growth, efficient operational management, and a balanced capital structure. The company demonstrates robust cash flow generation, which underpins its financial stability and positions it well for future growth and resilience.Income Statement
Universal Health has shown a consistent increase in revenue with a strong revenue growth rate of 7.96% for the TTM (Trailing-Twelve-Months) compared to the previous year. The gross profit margin stands at 30.68%, with a healthy net profit margin of 6.66%. The EBIT margin is robust at 10.00%, while the EBITDA margin is 13.79%, indicating efficient operational management.85
Very Positive
Balance Sheet
The company maintains a moderate debt-to-equity ratio of 0.77, reflecting a balanced approach to leverage. The return on equity (ROE) is strong at 15.54%, showcasing effective utilization of shareholder funds. The equity ratio is stable at 46.01%, suggesting a solid capital structure and financial stability.78
Positive
Cash Flow
Universal Health has demonstrated impressive free cash flow growth of 81.76% in the TTM, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is 1.81, indicating efficient conversion of income into cash. The free cash flow to net income ratio is 0.93, suggesting good free cash flow coverage relative to earnings.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 15.42B | 14.28B | 13.40B | 12.64B | 11.56B | 11.38B | Gross Profit |
| 4.73B | 5.64B | 11.93B | 11.21B | 10.27B | 10.13B | EBIT |
| 1.54B | 1.18B | 1.00B | 1.36B | 1.36B | 1.22B | EBITDA |
| 2.13B | 1.72B | 1.64B | 1.93B | 1.87B | 1.80B | Net Income Common Stockholders |
| 1.03B | 717.79M | 675.61M | 991.59M | 943.95M | 814.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 119.44M | 119.44M | 102.82M | 115.30M | 1.22B | 61.27M | Total Assets |
| 13.97B | 13.97B | 13.49B | 13.09B | 13.48B | 11.67B | Total Debt |
| 5.37B | 5.37B | 5.27B | 4.56B | 4.19B | 4.31B | Net Debt |
| 5.25B | 5.25B | 5.17B | 4.44B | 2.97B | 4.25B | Total Liabilities |
| 7.77B | 7.77B | 7.52B | 6.90B | 7.07B | 6.09B | Stockholders Equity |
| 6.15B | 6.15B | 5.92B | 6.09B | 6.32B | 5.50B |
| Cash Flow | Free Cash Flow | ||||
| 953.68M | 524.74M | 262.02M | 28.04M | 1.63B | 774.95M | Operating Cash Flow |
| 1.86B | 1.27B | 996.02M | 883.70M | 2.36B | 1.44B | Investing Cash Flow |
| -941.96M | -763.27M | -647.30M | -914.47M | -802.56M | -688.41M | Financing Cash Flow |
| -900.43M | -493.94M | -318.40M | -1.07B | -384.86M | -845.04M |
Universal Health Technical Analysis
Negative
173.30
Price Trends
183.64
Negative
194.89
Negative
200.28
Negative
Market Momentum
-2.55
Positive
39.44
Neutral
29.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UHS, the sentiment is Negative. The current price of 173.3 is below the 20-day moving average (MA) of 183.25, below the 50-day MA of 183.64, and below the 200-day MA of 200.28, indicating a bearish trend. The MACD of -2.55 indicates Positive momentum. The RSI at 39.44 is Neutral, neither overbought nor oversold. The STOCH value of 29.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UHS.
Universal Health Risk Analysis
Universal Health disclosed 34 risk factors in its most recent earnings report. Universal Health 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
Universal Health Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $11.39B | 10.42 | 16.92% | 0.46% | 10.82% | 65.64% | |
72 Outperform | $11.67B | 3.81 | 76.72% | ― | 0.57% | 440.71% | |
65 Neutral | $77.50B | 14.18 | -230.22% | 0.85% | 8.67% | 15.32% | |
61 Neutral | $2.79B | 10.54 | 8.32% | ― | 7.69% | ― | |
52 Neutral | $418.16M | ― | 39.18% | ― | 1.16% | -278.41% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
UHS
Universal Health
173.30
-1.49
-0.85%
ACHC
Acadia Healthcare
30.46
-54.27
-64.05%
CYH
Community Health
3.03
0.19
6.69%
HCA
HCA Healthcare
312.05
-1.04
-0.33%
THC
Tenet Healthcare
122.67
27.11
28.37%
Universal Health Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -3.67% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong financial performance, with notable revenue growth in both acute care and behavioral health segments, effective expense management, and continued investment in expansion. However, increased liability reserves, uncertainties around Medicaid reimbursements, and challenges in behavioral health volume growth present areas of concern. Overall, the call reflects a cautiously optimistic outlook for 2025.Highlights
Strong Financial Performance
Universal Health Services reported net income per diluted share of $4.96 for Q4 2024. Adjusted net income per diluted share was $4.92. Cash generated from operating activities was $658 million in Q4 2024 compared to $452 million in Q4 2023.
Increase in Acute Care and Behavioral Health Revenues
Same facility net revenues in acute care hospitals increased by 8.7%, while behavioral health hospitals saw a revenue increase of 11.1% in Q4 2024.
Effective Expense Management
Premium pay costs were reduced from a peak of $153 million in Q1 2022 to $60 million in Q4 2024, indicating effective management of operating expenses.
Capital Expenditure and Expansion
Capital expenditures for 2024 were $944 million, consistent with forecasts. New hospitals were opened, including West Henderson Hospital, with plans to open Cedar Hill Medical Center soon.
Share Repurchase Program
In 2024, $599 million worth of shares were repurchased, continuing a trend since 2019, with 32% of shares outstanding repurchased since then.
Positive Outlook for 2025
EBITDA growth is forecasted in the mid-single digits, with stable cost trends and improvement in salary and wages anticipated.
Lowlights
Increased Liability Reserves
A $35 million increase was recorded in self-insured professional and general liability claims for Q4 2024, contributing to a $79 million increase for the full year.
Medicaid Reimbursement Uncertainty
There is uncertainty in ongoing Medicaid reimbursements, with 2025 forecasts excluding supplemental Medicaid revenues in Tennessee and DC pending CMS approval.
Malpractice Claims Volatility
Incremental malpractice expenses of $79 million above the initial plan were recorded, with future adjustments possible due to volatility in this area.
Challenges in Behavioral Health Volume
Behavioral health patient days growth was below expectations at the end of 2024, affected by holiday schedules and winter weather.
Company Guidance
During the fourth quarter earnings call for Universal Health Services (UHS), the company provided guidance for 2025, highlighting several key metrics and trends. UHS expects EBITDA growth in the mid-single digits, driven by stable salary and wage trends and effective expense control, with a projected 2.5% to 3% growth in same facility adjusted patient days in behavioral services. The company anticipates a slight decrease in total consolidated Medicaid supplemental payments compared to 2024, as the 2025 forecast excludes any supplemental Medicaid revenues from Tennessee and the District of Columbia pending approval. UHS also reported a significant $35 million increase to reserves for self-insured professional and general liability claims in the fourth quarter, contributing to a $79 million increase for the full year. For 2024, UHS generated $2.067 billion in cash from operating activities, with $944 million spent on capital expenditures, aligning with their forecast. The company repurchased $599 million of its own shares and maintained $1.17 billion of aggregate available borrowing capacity. UHS plans to continue investing in outpatient services and technology to enhance patient care and improve patient experience scores.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.