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Universal Health
(NYSE:UHS)
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Rating:71Outperform
Price Target:
$180.00
▲(15.57% Upside)
Action:Reiterated
Date:07/31/26
UHS scores as a solid but not top-tier setup: strong profitability/ROE and improving leverage support the fundamentals, and the low P/E provides meaningful valuation support. These positives are tempered by weak recent cash conversion (and a large Q2 operating cash flow decline) plus mixed/trimmed guidance driven by several near-term headwinds. Technically, the stock is improving in the short term but remains in a longer-term downtrend versus the 100/200-day averages.
Positive Factors
Improving profitability and leverage
Sustained net margins (~8.4% TTM) and ~20% ROE show durable operating efficiency across hospital and behavioral units. Combined with falling debt-to-equity (~0.69 TTM), this enhances financial flexibility to invest, repay debt, or fund strategic priorities over the medium term.
Negative Factors
Weak cash conversion and volatile OCF
Persistent low cash conversion and a dramatic Q2 OCF drop signal earnings are not fully translating into cash. That constrains organic funding for capex and working capital, raises reliance on credit facilities, and reduces buffer against reimbursement or volume shocks over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving profitability and leverage
Sustained net margins (~8.4% TTM) and ~20% ROE show durable operating efficiency across hospital and behavioral units. Combined with falling debt-to-equity (~0.69 TTM), this enhances financial flexibility to invest, repay debt, or fund strategic priorities over the medium term.
Read all positive factors
Universal Health Key Performance Indicators (KPIs)
Any
Segment Net Revenue Breakdown
Breaks down net revenue by segment to show where money is earned and how the revenue mix is shifting; useful for identifying growth drivers, pricing power, and concentration risks if revenue depends on a few segments.
Breaks down net revenue by segment to show where money is earned and how the revenue mix is shifting; useful for identifying growth drivers, pricing power, and concentration risks if revenue depends on a few segments.
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The Fly
The FlyUniversal Health (UHS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.19B
Dividend Yield0.47%
Average Volume (3M)870.60K
Price to Earnings (P/E)6.9
Beta (1Y)0.56
Revenue Growth10.05%
EPS Growth28.53%
CountryUS
Employees101,500
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)24.66
Shares Outstanding53,287,605
10 Day Avg. Volume879,730
30 Day Avg. Volume870,604
Financial Highlights & Ratios
PEG Ratio0.26
Price to Book (P/B)1.91
Price to Sales (P/S)0.80
P/FCF Ratio16.32
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$194.92Price Target Upside25.15% Upside
Rating ConsensusHold
Number of Analyst Covering13
EPS Forecast (FY)22.66
Revenue Forecast (FY)$18.61B
Universal Health Business Overview & Revenue Model
Company Description
Universal Health Services, Inc. (UHS), operating through its various divisions, is a healthcare entity that both owns and manages a network of acute care hospitals, along with outpatient and specialized behavioral health treatment centers. Its bus...
How the Company Makes Money
UHS primarily makes money by providing patient care services at facilities it owns and operates, generating revenue from payments tied to admissions, patient days, procedures, and outpatient visits. Its largest revenue streams come from (1) the Ac...
Universal Health Earnings Call Summary
Earnings Call Date:Jul 27, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Neutral
The call presented a mixture of solid operational progress and clear strategic initiatives (EPS and EBITDA growth, new capacity additions, Joint Commission accreditation, Talkspace acquisition, active share repurchases, and continued rate and revenue per unit growth) alongside multiple material near-term headwinds (out-of-period supplemental benefits masking underlying shortfalls, higher liability reserves, de novo ramp delays, a recertifying Texas behavioral facility with ongoing losses, a steep drop in operating cash flow, and a trimmed EBITDA outlook). Management retained a constructive long-term view and updated guidance still shows growth, but several one-time and structural challenges are weighing on near-term results and cash flow.Positive Updates
Adjusted EPS Growth
Adjusted EPS of $5.98 in Q2 2026, representing 12% year-over-year growth.
Negative Updates
Out-of-Period Supplemental Benefit Masking Underlying Shortfall
Q2 results included a $100 million out-of-period Florida DPP benefit; excluding this benefit, Q2 adjusted EBITDA less NCI missed internal expectations due to ~ $63 million of adverse items.
Read all updates
Q2-2026 Updates
Positive
Negative
Adjusted EPS Growth
Adjusted EPS of $5.98 in Q2 2026, representing 12% year-over-year growth.
Read all positive updates
Company Guidance
UHS updated 2026 guidance to about 7% revenue growth, ~3% adjusted EBITDA less NCI growth and ~6% adjusted EPS growth at the midpoint, with adjusted EBITDA less NCI now guided to $2.61B–$2.72B (midpoint $2.66B), roughly $50M below the prior midpoint; the company now expects ~ $1.5B of Medicaid supplemental net benefit for the year (up ~$150M, including a $100M Florida DPP benefit recognized in Q2 and an expected ~$25M Texas ATLIS benefit in Q3) that is largely offset by about $200M of adverse items (including a ~$50M hit tied to the Texas behavioral facility—~$20M in Q2 and $30M in H2—an adjustment to the Cedar Hill de novo tailwind from $50M to $20M, a ~$50M increase in professional and general liability expense with $28M recorded in Q2, and roughly $50M from fine‑tuned volume assumptions); same‑facility volume guidance was narrowed to acute adjusted admissions of 1.5%–2.5% (centered ~2%) and behavioral adjusted patient days of 1.0%–2.0% (centered ~1.5%), while management reiterated active share repurchases (Q2 buybacks $320M; $978M repurchase authorization remaining).Universal Health Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 18.11B | 17.36B | 15.83B | 14.28B | 13.40B | 12.64B |
| Gross Profit | 16.43B | 15.71B | 14.24B | 12.75B | 11.93B | 11.21B |
| EBITDA | 2.82B | 2.74B | 2.27B | 1.72B | 1.58B | 1.91B |
| Net Income | 1.53B | 1.49B | 1.14B | 717.79M | 675.61M | 991.59M |
Balance Sheet | ||||||
| Total Assets | 15.94B | 15.96B | 14.47B | 13.97B | 13.49B | 13.09B |
| Cash, Cash Equivalents and Short-Term Investments | 138.80M | 137.80M | 125.98M | 119.44M | 102.82M | 115.30M |
| Total Debt | 5.26B | 5.51B | 4.96B | 5.37B | 5.27B | 4.56B |
| Total Liabilities | 8.28B | 8.55B | 7.71B | 7.77B | 7.52B | 6.90B |
| Stockholders Equity | 7.51B | 7.28B | 6.67B | 6.15B | 5.92B | 6.09B |
Cash Flow | ||||||
| Free Cash Flow | 826.72M | 849.25M | 1.12B | 524.74M | 262.02M | 28.04M |
| Operating Cash Flow | 1.80B | 1.86B | 2.07B | 1.27B | 996.02M | 883.70M |
| Investing Cash Flow | -925.19M | -1.07B | -911.11M | -763.27M | -647.30M | -914.47M |
| Financing Cash Flow | -842.04M | -749.73M | -1.14B | -493.94M | -318.40M | -1.07B |
Universal Health Technical Analysis
Positive
155.75
Price Trends
152.34
Positive
163.90
Positive
190.54
Negative
Market Momentum
5.28
Negative
67.30
Neutral
83.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UHS, the sentiment is Positive. The current price of 155.75 is below the 20-day moving average (MA) of 159.19, above the 50-day MA of 152.34, and below the 200-day MA of 190.54, indicating a neutral trend. The MACD of 5.28 indicates Negative momentum. The RSI at 67.30 is Neutral, neither overbought nor oversold. The STOCH value of 83.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UHS.
Universal Health Risk Analysis
Universal Health disclosed 32 risk factors in its most recent earnings report. Universal Health reported the most risks in the "Production" 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
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $20.51B | 9.75 | 50.63% | ― | 5.43% | 65.86% | |
72 Outperform | $11.02B | 18.27 | 23.14% | 0.67% | 10.05% | 23.59% | |
71 Outperform | $10.19B | 6.87 | 20.66% | 0.51% | 10.05% | 28.53% | |
62 Neutral | $87.16B | 13.44 | -112.87% | 0.78% | 7.31% | 25.54% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | $2.76B | -2.38 | -50.02% | ― | 4.27% | -917.61% | |
42 Neutral | $393.42M | -1.23 | 20.91% | ― | -5.25% | ― |
* Healthcare Sector Average
UHS
Universal Health
173.54
1.97
1.15%
ACHC
Acadia Healthcare
31.53
12.29
63.88%
CYH
Community Health
3.00
0.51
20.48%
HCA
HCA Healthcare
413.36
34.32
9.06%
EHC
Encompass Health
125.23
8.49
7.27%
THC
Tenet Healthcare
262.13
96.55
58.31%
Universal Health Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Universal Health adds new delayed draw term loan
Positive
Jul 21, 2026
On July 20, 2026, Universal Health Services, Inc. entered into a twelfth amendment to its long-standing credit agreement, creating a new incremental delayed draw tranche A term loan facility of up to $700 million under its senior secured credit fa...
Executive/Board ChangesShareholder Meetings
Universal Health Shareholders Back Board, Pay and Auditor
Positive
May 22, 2026
On May 20, 2026, Universal Health held its 2026 Annual Meeting of Stockholders virtually via live audio webcast, where shareholders elected two Class III directors, Alan B. Miller and Nina Chen-Langenmayr, to three-year terms ending at the 2029 an...
Business Operations and StrategyExecutive/Board Changes
Universal Health Announces Leadership Transition in Behavioral Health
Neutral
May 21, 2026
Universal Health Services, Inc. announced that Matthew J. Peterson, Executive Vice President and President of Behavioral Health since 2019, submitted his resignation on May 18, 2026, effective June 19, 2026, to pursue a non‑competitive exter...
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.