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Universal Health (UHS)
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Universal Health (UHS) AI Stock Analysis

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UHS

Universal Health

(NYSE:UHS)

Rating:73Outperform
Price Target:
$197.00
▲(26.72%Upside)
Universal Health's strong financial performance and undervaluation are significant factors driving its stock score. Despite mixed technical signals and some risks highlighted in the earnings call, the company's robust financial health and consistent growth position it well for future performance.
Positive Factors
Financial Estimates
Recently approved Tennessee Directed Payment Program contributes positively to financial estimates.
New Hospital Performance
Stronger contribution from UHS' new NV West Henderson hospital, ramping faster than historical averages.
Stock Valuation
The stock is trading toward the low end of its valuation, suggesting potential for upward movement.
Negative Factors
Headwinds to EBITDA Growth
Analyst anticipates an annual 2-3% headwind to EBITDA growth through 2030 due to reductions in coverage and additional cuts ramping up in the future.
Medicaid and ACA Exchange Cuts
Analyst downgrades UHS from Neutral to Underperform due to increasing headwinds from cuts to Medicaid and ACA exchanges.
Reconciliation Bill Impact
The passage of significant cuts to Medicaid and Exchanges in the Reconciliation Bill is expected to lead to lower volume growth and increased bad debt for hospitals.

Universal Health (UHS) vs. SPDR S&P 500 ETF (SPY)

Universal Health Business Overview & Revenue Model

Company DescriptionUniversal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, and outpatient and behavioral health care facilities. The company operates through Acute Care Hospital Services and Behavioral Health Care Services segments. Its hospitals offer general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic and coronary care, pediatric services, pharmacy services, and/or behavioral health services. As of February 24, 2022, it owned and/or operated 363 inpatient facilities, and 40 outpatient and other facilities located in 39 states; Washington, D.C.; the United Kingdom; and Puerto Rico. The company also provides commercial health insurance services; and various management services, which include central purchasing, information, finance and control systems, facilities planning, physician recruitment, administrative personnel management, marketing, and public relations services. Universal Health Services, Inc. founded in 1978 and is headquartered in King of Prussia, Pennsylvania.
How the Company Makes MoneyUniversal Health Services, Inc. generates revenue through its network of acute care hospitals and behavioral health facilities. The primary revenue streams include patient service revenues, which are derived from hospital admissions, outpatient consultations, and various healthcare services provided to patients. UHS also benefits from contracts with government programs like Medicare and Medicaid, as well as agreements with private health insurance companies. The company collaborates with insurers and other healthcare providers to expand its service reach and enhance patient care, which contributes significantly to its earnings. Additionally, UHS's strategic acquisitions and expansions into new markets provide avenues for increased revenue and market share.

Universal Health Earnings Call Summary

Earnings Call Date:Apr 28, 2025
(Q1-2025)
|
% Change Since: -10.00%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook for Universal Health Services with strong revenue growth and effective expense management across both acute care and behavioral health segments. However, challenges such as decreased cash flow and uncertainties surrounding Medicaid supplemental payments posed concerns.
Q1-2025 Updates
Positive Updates
Increase in Acute Care Hospital Metrics
Adjusted admissions to acute care hospitals increased by 2.4% and same facility net revenues increased by 5.0% in the first quarter of 2025 compared to the previous year.
Behavioral Health Revenue Growth
Same-facility net revenues at behavioral health hospitals increased by 5.5% due to a 5.8% increase in revenue per adjusted day.
Strong Operating Expense Management
Operating expenses on a same facility basis increased by only 2.6%, contributing to a 21% increase in EBITDA after excluding Medicaid supplemental payments.
Positive EBITDA from New Hospital
West Henderson Hospital in Las Vegas, opened in late 2024, posted a modestly positive EBITDA in its first full quarter.
Significant Share Repurchase
The company repurchased 1 million shares at a cost of approximately $181 million in Q1 2025, continuing a long-term trend of share buybacks.
Negative Updates
Decrease in Operating Cash Flow
Cash generated from operating activities decreased from $396 million in Q1 2024 to $360 million in Q1 2025, partially due to delays in Medicaid supplemental payment receipts.
Behavioral Health Volume Challenges
Adjusted patient days at behavioral health hospitals were relatively flat due to the leap year comparison and adverse weather conditions.
Uncertainty in Medicaid Supplementals
Pending CMS approvals for Medicaid supplemental revenues in Tennessee and the District of Columbia, adding uncertainty to revenue projections.
Supply Chain and Tariff Concerns
Potential tariffs could impact 25% of supply chain purchases, although currently, no significant pressure is reported.
Company Guidance
During the UHS 2025 Q1 conference call, Steve Filton highlighted key metrics and guidance for the fiscal year. The company reported a net income attributable to UHS per diluted share of $4.80, with an adjusted figure of $4.84. Acute care hospital segment saw a 2.4% increase in adjusted admissions and a 5.0% rise in same-facility net revenues, excluding insurance subsidiary impacts. Operating expenses were well-managed, rising 2.6% on a same-facility basis. The EBITDA increased by 21% after excluding Medicaid supplemental payments. Behavioral health hospitals experienced a 5.5% increase in same-facility net revenues, driven by a 5.8% increase in revenue per adjusted day, despite relatively flat adjusted patient days. Cash generated from operating activities fell to $360 million, influenced by delays in Medicaid supplemental payments. UHS spent $239 million on capital expenditures and repurchased 1 million shares for $181 million. As of March 31, 2025, UHS had $1.02 billion of available borrowing capacity on its $1.3 billion revolving credit facility. The company reiterated its full-year earnings guidance, citing confidence in their underlying business performance despite external uncertainties.

Universal Health Financial Statement Overview

Summary
Universal Health exhibits strong financial health characterized by consistent revenue growth, strong profitability, and effective cash flow management. While leverage is moderate, the company’s robust equity position and growing cash flows mitigate risks.
Income Statement
84
Very Positive
Universal Health has demonstrated consistent revenue growth with a notable increase in total revenue from $11.56 billion in 2020 to $16.08 billion in TTM 2025. The gross profit margin remains robust, indicating effective cost management. Net profit margin has improved, reflecting enhanced operational efficiency. EBIT and EBITDA margins are strong, indicating solid profitability in core operations.
Balance Sheet
75
Positive
The company maintains a healthy equity ratio, with stockholders' equity consistently representing a substantial portion of total assets. The debt-to-equity ratio shows moderate leverage, which is manageable given the company's strong equity base. Return on equity is improving, demonstrating effective use of equity capital.
Cash Flow
78
Positive
Operating cash flow is strong, consistently exceeding net income, indicating good cash conversion. Free cash flow has grown significantly, supporting further investment and debt management. The cash flow metrics reflect strong financial health with ample liquidity to support operations and strategic initiatives.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue16.08B15.83B14.28B13.40B12.64B11.56B
Gross Profit9.40B14.24B12.75B11.93B11.21B10.27B
EBITDA2.34B2.27B1.74B1.58B1.91B1.87B
Net Income1.20B1.14B717.79M675.61M991.59M943.95M
Balance Sheet
Total Assets14.88B14.47B13.97B13.49B13.09B13.48B
Cash, Cash Equivalents and Short-Term Investments126.75M125.98M119.44M102.82M115.30M1.22B
Total Debt5.09B4.96B5.37B5.27B4.56B4.19B
Total Liabilities7.99B7.71B7.77B7.52B6.90B7.07B
Stockholders Equity6.87B6.75B6.15B5.92B6.09B6.32B
Cash Flow
Free Cash Flow1.06B1.12B524.74M262.02M28.04M1.63B
Operating Cash Flow2.03B2.07B1.27B996.02M883.70M2.36B
Investing Cash Flow-987.77M-911.11M-763.27M-647.30M-914.47M-802.56M
Financing Cash Flow-1.03B-1.14B-493.94M-318.40M-1.07B-384.86M

Universal Health Technical Analysis

Technical Analysis Sentiment
Negative
Last Price155.46
Price Trends
50DMA
180.82
Negative
100DMA
178.83
Negative
200DMA
187.15
Negative
Market Momentum
MACD
-4.74
Positive
RSI
25.74
Positive
STOCH
7.99
Positive
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 155.46 is below the 20-day moving average (MA) of 176.48, below the 50-day MA of 180.82, and below the 200-day MA of 187.15, indicating a bearish trend. The MACD of -4.74 indicates Positive momentum. The RSI at 25.74 is Positive, neither overbought nor oversold. The STOCH value of 7.99 is Positive, 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 31 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

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$15.78B23.964.36%0.10%-0.91%27.17%
73
Outperform
$10.62B9.2618.35%0.51%9.73%51.87%
70
Outperform
$11.42B14.98260.92%5.11%14.28%
67
Neutral
$84.99B15.70-230.22%0.81%7.30%11.60%
67
Neutral
$14.70B10.1341.09%-1.09%-43.10%
65
Neutral
$10.96B22.4525.33%0.63%11.21%30.38%
52
Neutral
$7.61B0.10-63.03%2.08%16.34%0.32%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UHS
Universal Health
155.46
-57.37
-26.96%
DVA
DaVita
144.77
7.36
5.36%
FMS
Fresenius Medical Care
26.76
6.85
34.40%
HCA
HCA Healthcare
341.48
-10.48
-2.98%
EHC
Encompass Health
107.13
16.13
17.73%
THC
Tenet Healthcare
148.38
-3.25
-2.14%

Universal Health Corporate Events

Executive/Board ChangesShareholder Meetings
Universal Health Holds Annual Stockholders Meeting
Neutral
May 15, 2025

On May 14, 2025, Universal Health held its Annual Meeting of Stockholders virtually. During the meeting, stockholders elected two Class II members to the Board of Directors for a term ending in 2028, ratified PricewaterhouseCoopers, LLP as the independent accounting firm for 2025, and voted against a proposal for annual director elections.

The most recent analyst rating on (UHS) stock is a Buy with a $240.00 price target. To see the full list of analyst forecasts on Universal Health stock, see the UHS 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: Jul 16, 2025