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Universal Health (UHS)
NYSE:UHS

Universal Health (UHS) AI Stock Analysis

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Universal Health

(NYSE:UHS)

Rating:77Outperform
Price Target:
$206.00
▲(11.63%Upside)
Universal Health Services shows strong financial performance with consistent revenue growth and profitability. Technical indicators suggest short-term positive momentum, though long-term caution is warranted. Valuation metrics indicate the stock is undervalued, supporting investment appeal. The earnings call reinforces confidence despite some cash flow and regulatory uncertainties.
Positive Factors
Earnings
Adjusted EPS of $4.84 beat Street estimates by 11%.
Operational Performance
West Henderson is already generating positive EBITDA which should offset Cedar Hill losses in the second half.
Valuation
The stock is trading toward the low end of its valuation, suggesting potential for upward movement.
Negative Factors
Analyst Expectations
Quarterly EBITDA estimates for UHS appear too high and are being adjusted downwards.
Cost Management
Start-up costs likely higher with the Cedar Hill Hospital in DC opening, leading to increased costs before improving in the second half.
Volume Growth
Behavioral volumes were soft with no volume growth, attributed to calendar headwinds and winter weather impacting referrals.

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: 6.83%|
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, robust profitability, and effective cash flow management. The company maintains a healthy equity ratio and strong cash flows, although leverage is moderate.
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
Positive
Last Price184.53
Price Trends
50DMA
181.94
Positive
100DMA
179.99
Positive
200DMA
191.24
Negative
Market Momentum
MACD
0.14
Negative
RSI
56.67
Neutral
STOCH
83.02
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 184.53 is above the 20-day moving average (MA) of 177.50, above the 50-day MA of 181.94, and below the 200-day MA of 191.24, indicating a neutral trend. The MACD of 0.14 indicates Negative momentum. The RSI at 56.67 is Neutral, neither overbought nor oversold. The STOCH value of 83.02 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 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
UHUHS
77
Outperform
$11.89B10.3618.35%0.43%9.73%51.87%
EHEHC
75
Outperform
$11.98B24.5425.33%0.57%11.21%30.38%
MOMOH
72
Outperform
$12.99B11.5726.72%16.71%12.23%
72
Outperform
$9.24B24.5465.82%9.87%32.81%
THTHC
71
Outperform
$15.93B11.3438.12%-1.79%-41.85%
60
Neutral
$2.15B11.476.35%5.48%
52
Neutral
$7.50B0.31-61.87%2.27%17.10%1.59%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
UHS
Universal Health
184.53
4.63
2.57%
ACHC
Acadia Healthcare
23.36
-42.28
-64.41%
EHC
Encompass Health
119.04
35.63
42.72%
MOH
Molina Healthcare
239.58
-53.20
-18.17%
THC
Tenet Healthcare
171.50
42.23
32.67%
MEDP
Medpace Holdings
321.50
-84.14
-20.74%

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 01, 2025