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Tenet Healthcare (THC) Soars 95.8% YTD: More Room to Run?
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Tenet Healthcare Corporation (THC - Free Report) has been in investors’ good books for a while now on the back of its strategic initiatives, divestitures and cost-reduction efforts.
Over the past 30 days, the hospital player has witnessed its 2022 earnings estimate move 0.9% north.
Tenet Healthcare is steadily undertaking strategic divestitures to shed its non-core and unprofitable business units to streamline operations and repay debt. THC’s spin-off of its Conifer business into an independent publicly-traded company is expected to close by the end of 2021. THC is likely to reduce its debt burden using the proceeds from this transaction.
This leading player in the hospital industry continuously gains from its restructuring initiatives that lowered costs to a great extent. Tenet Healthcare also recently announced the sale of its Miami-based hospitals for business rejig.
THC has also been gaining leverage from its Ambulatory Care segment for a while. Tenet Healthcare’s revenues are steadily gaining from its USPI unit’s performance and also its 2020 buyout of the SCD Centers. USPI had interests in 318 ambulatory surgery centers and 24 surgical hospitals in 31 states as of Sep 30, 2021.
Tenet Healthcare along with its USPI unit also completed the pending buyout of SurgCenter Development (SCD). The deal will not only boost USPI's footprint in the existing markets, such as Florida, but also enable THC to enter new markets like Michigan.
THC continues boosting its presence and expanding its portfolio through numerous acquisitions, partnerships and strategic alliances. Tenet Healthcare earlier partnered with biggies like Blue Cross Blue Shield of Texas, Cigna, Aetna, UnitedHealth, Humana and so on. THC also reached an agreement with Compass Surgical Partners to acquire their interest and management responsibilities in 9 ASCs. Tenet Healthcare is also penetrating further in North Carolina.
Concurrent with third-quarter results, Tenet Healthcare updated its outlook for 2021. For the current year, THC projects net income per share to be $7.09-$7.50, higher than the prior guidance of $6.25-$7.17.
Net operating revenues are anticipated between $19.5 and $19.8 billion, up from the prior forecast of $19.25-$19.65 billion.
Adjusted EPS is expected within $6.15-$6.38, higher than the previous guidance of $5.23-$5.73. This should instill investors’ confidence in the stock. However, steep expenses remain a concern.
Further Upside Left?
We believe that Tenet Healthcare is well-poised for growth on the back of various strategic actions. The stock carries a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
The Zacks Consensus Estimate for Tenet Healthcare’s 2021 earnings indicates an improvement of 34.5% from the year-ago reported figure.
Other Stocks to Consider
Some other top-ranked stocks in the medical sector are Molina Healthcare Inc. (MOH - Free Report) , NextGen Healthcare, Inc. and AMN Healthcare Services (AMN - Free Report) .
With a Zacks Rank of 2 at present, Molina Healthcare Inc. is a multi-state managed care organization participating exclusively in government-sponsored healthcare programs. Its earnings beat the consensus mark in two of the trailing four quarters (missing the mark in the remaining two), the average surprise being 4%.
NextGen Healthcare is a developer and marketer of healthcare information systems. With a Zacks Rank of 2 at present, NXGN has a trailing four-quarter earnings surprise of 16%, on average.
AMN Healthcare Services is a travel healthcare staffing company with a Zacks Rank #1 at present. It has a trailing four-quarter earnings surprise of 19.5%, on average.
Shares of NextGen Healthcare have lost 3.3% in a year’s time, while the stocks of Molina and AMN Healthcare Services have rallied 48.8% and 77.8% each.
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Tenet Healthcare (THC) Soars 95.8% YTD: More Room to Run?
Tenet Healthcare Corporation (THC - Free Report) has been in investors’ good books for a while now on the back of its strategic initiatives, divestitures and cost-reduction efforts.
Over the past 30 days, the hospital player has witnessed its 2022 earnings estimate move 0.9% north.
Shares of this currently Zacks Rank #2 (Buy) hospital organization have skyrocketed 95.8% year to date compared with its industry’s growth of 37.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tenet Healthcare is steadily undertaking strategic divestitures to shed its non-core and unprofitable business units to streamline operations and repay debt. THC’s spin-off of its Conifer business into an independent publicly-traded company is expected to close by the end of 2021. THC is likely to reduce its debt burden using the proceeds from this transaction.
This leading player in the hospital industry continuously gains from its restructuring initiatives that lowered costs to a great extent. Tenet Healthcare also recently announced the sale of its Miami-based hospitals for business rejig.
THC has also been gaining leverage from its Ambulatory Care segment for a while. Tenet Healthcare’s revenues are steadily gaining from its USPI unit’s performance and also its 2020 buyout of the SCD Centers. USPI had interests in 318 ambulatory surgery centers and 24 surgical hospitals in 31 states as of Sep 30, 2021.
Tenet Healthcare along with its USPI unit also completed the pending buyout of SurgCenter Development (SCD). The deal will not only boost USPI's footprint in the existing markets, such as Florida, but also enable THC to enter new markets like Michigan.
THC continues boosting its presence and expanding its portfolio through numerous acquisitions, partnerships and strategic alliances. Tenet Healthcare earlier partnered with biggies like Blue Cross Blue Shield of Texas, Cigna, Aetna, UnitedHealth, Humana and so on. THC also reached an agreement with Compass Surgical Partners to acquire their interest and management responsibilities in 9 ASCs. Tenet Healthcare is also penetrating further in North Carolina.
Concurrent with third-quarter results, Tenet Healthcare updated its outlook for 2021. For the current year, THC projects net income per share to be $7.09-$7.50, higher than the prior guidance of $6.25-$7.17.
Net operating revenues are anticipated between $19.5 and $19.8 billion, up from the prior forecast of $19.25-$19.65 billion.
Adjusted EPS is expected within $6.15-$6.38, higher than the previous guidance of $5.23-$5.73. This should instill investors’ confidence in the stock.
However, steep expenses remain a concern.
Further Upside Left?
We believe that Tenet Healthcare is well-poised for growth on the back of various strategic actions. The stock carries a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
The Zacks Consensus Estimate for Tenet Healthcare’s 2021 earnings indicates an improvement of 34.5% from the year-ago reported figure.
Other Stocks to Consider
Some other top-ranked stocks in the medical sector are Molina Healthcare Inc. (MOH - Free Report) , NextGen Healthcare, Inc. and AMN Healthcare Services (AMN - Free Report) .
With a Zacks Rank of 2 at present, Molina Healthcare Inc. is a multi-state managed care organization participating exclusively in government-sponsored healthcare programs. Its earnings beat the consensus mark in two of the trailing four quarters (missing the mark in the remaining two), the average surprise being 4%.
NextGen Healthcare is a developer and marketer of healthcare information systems. With a Zacks Rank of 2 at present, NXGN has a trailing four-quarter earnings surprise of 16%, on average.
AMN Healthcare Services is a travel healthcare staffing company with a Zacks Rank #1 at present. It has a trailing four-quarter earnings surprise of 19.5%, on average.
Shares of NextGen Healthcare have lost 3.3% in a year’s time, while the stocks of Molina and AMN Healthcare Services have rallied 48.8% and 77.8% each.