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Bull of the Day: Tenet Healthcare Corp. (THC)

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Tenet Healthcare Corp. (THC - Free Report) is an investor-owned healthcare services company that owns and operates general hospitals and related healthcare facilities for urban and rural communities in numerous states.

Its hospitals offer acute care services, operating and recovery rooms, radiology services, respiratory therapy services, clinical laboratories, pharmacies, and more.

The company’s earnings outlook has become notably bright over the last several months, pushing the stock into a highly coveted Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Image Source: Zacks Investment Research

In addition to favorable earnings estimate revisions, the stock resides in the Zacks Medical - Hospital industry, currently ranked in the top 12% of all Zacks industries. Let’s take a closer look at how the company currently stacks up.

 

Tenet Healthcare Posts Robust Results

The company’s latest set of quarterly results blew away expectations, with shares melting higher post-earnings. Concerning headline figures, THC beat the Zacks Consensus EPS estimate by 120% and reported sales 4% ahead of expectations, representing Y/Y growth rates of 127% and 7%, respectively.

Up 80% in 2024, quarterly results have kept shares hot.

Zacks Investment Research
Image Source: Zacks Investment Research

The results blew away prior guidance, with the company also upping its FY24 financial outlook – THC’s adjusted EBITDA is now expected to be in a band of $3.5 - $3.7 billion, reflecting a $215 million increase from prior views.

CEO Saum Sutaria confirmed the strong results, stating, "Our operational excellence and focus on continuous improvement helped enable our momentum as we transform our company through strategic portfolio decisions, disciplined capital allocation, and debt reduction."

Margin expansion has been aiding the company’s profitability, as we can see illustrated below. Please note that the chart is on a trailing twelve-month basis.

Zacks Investment Research
Image Source: Zacks Investment Research

The company’s cash-generating abilities have also seen a nice boost, with free cash flow of $346 million throughout its latest quarter jumping from the $214 million mark in the same period last year. It’s also involved in a buyback program, scooping up $278 million in shares throughout its latest quarter.

 

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Tenet Healthcare Corp. (THC - Free Report) would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).


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