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Tenet Healthcare Corp THC

Morningstar Rating
$92.38 +0.92 (1.01%)
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Company Report

Tenet Earnings: Robust Utilization Trends and Expanded Services Support Our Valuation Increase

No-moat Tenet ended the year with strong fourth-quarter results above our expectations. We are raising our fair value estimate to $104 per share from $95 mainly due to higher margin projections as the company continues to expand its high-acuity service lines and improve its operating efficiency. We applaud Tenet’s efforts to enhance its credit profile through hospital portfolio optimization and debt retirement. In our view, despite the 60% stock price rally since last November, Tenet’s shares remain moderately undervalued.

Price vs Fair Value

THC is trading within a range we consider fairly valued.
Price
$92.38
Fair Value
$983.00
Uncertainty
High
1-Star Price
$834.70
5-Star Price
$12.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

With new management in place since late 2017, Tenet has become a more efficient and more profitable organization, suggesting that the team is making progress operationally.

Bears

Tenet operates with significant financial leverage that adds both fixed costs and some refinancing risk to the organization.

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News

Trading Information

Previous Close Price
$91.46
Day Range
$91.8792.90
52-Week Range
$49.7692.90
Bid/Ask
$60.00 / $95.55
Market Cap
$9.24 Bil
Volume/Avg
737,803 / 1.1 Mil

Key Statistics

Price/Earnings (Normalized)
14.05
Price/Sales
0.45
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
2.17%

Company Profile

Tenet Healthcare is a Dallas-based healthcare services organization. It operates a collection of hospitals (about 60 as of December 2023) and over 450 ambulatory surgery centers and other outpatient facilities across the U.S., primarily in the South. Through its Conifer segment, Tenet also provides revenue cycle management solutions.
Sector
Healthcare
Industry
Medical Care Facilities
Stock Style Box
Small Value
Total Number of Employees
106,500

Competitors

Valuation

Metric
THC
DVA
HCA
Price/Earnings (Normalized)
14.0514.7317.19
Price/Book Value
5.5510.38
Price/Sales
0.450.951.30
Price/Cash Flow
4.006.178.54
Price/Earnings
THC
DVA
HCA

Financial Strength

Metric
THC
DVA
HCA
Quick Ratio
1.101.060.86
Current Ratio
1.511.191.18
Interest Coverage
2.793.954.98
Quick Ratio
THC
DVA
HCA

Profitability

Metric
THC
DVA
HCA
Return on Assets (Normalized)
5.45%6.40%9.75%
Return on Equity (Normalized)
110.21%112.35%
Return on Invested Capital (Normalized)
11.10%10.05%16.43%
Return on Assets
THC
DVA
HCA
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Medical Care Facilities Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
HCA
HCA Healthcare IncBrmvlfp$82.7 Bil
FSNUY
Fresenius SE & Co KGaA ADRLwjcgk$15.7 Bil
FSNUF
Fresenius SE & Co KGaABpmvks$15.7 Bil
BDULF
Bangkok Dusit Medical Services PCL Shs Foreign RegisteredGbg$13.3 Bil
JDHIF
JD Health International IncJjdlhj$12.5 Bil
JDHIY
JD Health International Inc ADRJbddvyk$12.5 Bil
FMS
Fresenius Medical Care AG ADRVtyddy$11.4 Bil
DVA
DaVita IncVybkcv$10.7 Bil
AMN
AMN Healthcare Services IncJzhqn$2.2 Bil

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