Now trading at a price of $156.2, Tenet Healthcare has moved -3.5% so far today.
Tenet Healthcare returned gains of 166.5% last year, with its stock price reaching a high of $171.2 and a low of $51.04. Over the same period, the stock outperformed the S&P 500 index by 132.4%. More recently, the company's 50-day average price was $157.46. Tenet Healthcare Corporation operates as a diversified healthcare services company in the United States. Based in Dallas, TX, the Large-Cap Health Care company has 78,810 full time employees. Tenet Healthcare has not offered a dividend during the last year.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $18,313 | $18,479 | $17,640 | $19,485 | $19,174 | $20,548 |
| Operating Margins | 9% | 8% | 11% | 15% | 12% | 12% |
| Net Margins | 3% | 1% | 4% | 8% | 5% | 6% |
| Net Income (M) | $459 | $171 | $768 | $1,476 | $1,001 | $1,311 |
| Net Interest Expense (M) | $1,004 | $985 | $1,003 | $923 | $890 | $901 |
| Depreciation & Amort. (M) | $802 | $850 | $857 | $855 | $841 | $870 |
| Diluted Shares (M) | 104 | 103 | 106 | 109 | 111 | 105 |
| Earnings Per Share | $4.42 | $1.65 | $7.23 | $13.59 | $9.06 | $12.51 |
| EPS Growth | n/a | -62.67% | 338.18% | 87.97% | -33.33% | 38.08% |
| Avg. Price | $27.13 | $24.76 | $26.57 | $64.32 | $75.02 | $156.82 |
| P/E Ratio | 5.98 | 14.83 | 3.61 | 4.63 | 8.05 | 12.23 |
| Free Cash Flow (M) | $432 | $563 | $2,867 | $910 | $321 | $1,623 |
| CAPEX (M) | $617 | $670 | $540 | $658 | $762 | $751 |
| EV / EBITDA | 12.96 | 13.17 | 11.06 | 9.52 | 11.68 | 13.19 |
| Total Debt (M) | $29,288 | $29,160 | $31,148 | $31,022 | $29,868 | $29,764 |
| Net Debt / EBITDA | 11.84 | 12.11 | 10.09 | 7.69 | 9.14 | 8.44 |
| Current Ratio | 1.2 | 1.21 | 1.47 | 1.38 | 1.34 | 1.51 |
Tenet Healthcare benefits from strong operating margins with a positive growth rate, generally positive cash flows, and slight revenue growth and increasing reinvestment in the business. The company's financial statements show a strong EPS growth trend and a decent current ratio of 1.51. However, the firm has a highly leveraged balance sheet.
a Decline in Expected Earnings Clouds Its Value Outlook but Trades Above Its Graham Number:
Tenet Healthcare has a trailing twelve month P/E ratio of 5.7, compared to an average of 26.07 for the Health Care sector. Based on its EPS guidance of $11.37, the company has a forward P/E ratio of 13.8. According to the 14.5% compound average growth rate of Tenet Healthcare's historical and projected earnings per share, the company's PEG ratio is 0.4. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 11.4%. On this basis, the company's PEG ratio is 0.5. This suggests that its shares are undervalued. In contrast, Tenet Healthcare is likely overvalued compared to the book value of its equity, since its P/B ratio of 4.31 is higher than the sector average of 3.53. The company's shares are currently trading 137.7% below their Graham number.
Overview of Tenet Healthcare's Market Factors:
Tenet Healthcare has an average amount of shares sold short because 4.2% of the company's shares are sold short. Institutions own 98.6% of the company's shares, and the insider ownership rate stands at 1.16%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $1,620,919,857.
