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Will Patient Volumes Drive Universal Health's (UHS) Q2 Earnings?
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Universal Health Services, Inc. (UHS - Free Report) is scheduled to report second-quarter 2024 results on Jul 24, after the closing bell.
Q2 Estimates
The Zacks Consensus Estimate for UHS’ second-quarter earnings per share is pegged at $3.37, which implies a 33.2% rise from the year-ago quarter’s reported figure. The estimate was revised upward by one analyst over the past month against no movement in the opposite direction. During this time, the estimate has gained 2.4%.
The consensus mark for revenues is $3.8 billion, indicating 8.5% growth from the year-ago quarter’s tally.
Image Source: Zacks Investment Research
Earnings Surprise History
Universal Health boasts an impressive earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 8.12%.
Image Source: Zacks Investment Research
What our Quantitative Model Unveils
Our proven model predicts an earnings beat for Universal Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Universal Health has an Earnings ESP of +8.65% because the Most Accurate Estimate of $3.66 is pegged higher than the Zacks Consensus Estimate of $3.37. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: UHS currently carries a Zacks Rank of 2.
Now, let’s see how things have shaped up before the second-quarter earnings announcement.
Factors to Note
The top line of Universal Health is likely to have been bolstered by significant contributions from its Acute Care Hospital Services and Behavioral Health Care Services segments in the second quarter.
The Acute Care Hospital Services unit is expected to have been driven by an increase in adjusted admissions and higher net revenue per adjusted admission. However, elevated salaries, wages and benefits are likely to have hurt the overall performance of the unit.
The Zacks Consensus Estimate for net revenues in the Acute Care Hospital Services segment is pegged at $2.2 billion, indicating an 8.4% increase from the prior-year quarter’s reported figure. We estimate the metric to witness 7.4% year-over-year growth. Our estimate for the unit’s same-facility adjusted admissions indicates 5.4% growth from the prior-year quarter.
The Behavioral Health Care Services segment is likely to have gained from sustained demand for behavioral healthcare services amid the continued incidence of mental health issues among Americans. Furthermore, growth in adjusted patient days and revenue per adjusted patient day is expected to have benefited the unit’s performance.
The Zacks Consensus Estimate for net revenues in the Behavioral Health Care Services segment is pegged at $1.7 billion, which implies an 8.4% rise from the year-ago quarter’s reported figure. We estimate the metric to improve 7.6% year over year. Our estimate for the unit’s adjusted patient days indicates 1.9% year-over-year growth.
However, Universal Health’s margins are likely to have been affected by an escalating overall expense level, resulting from higher salaries, wages and benefits, along with a rise in supplies expenses in the second quarter. We expect salaries, wages and benefits, and supplies expenses to increase 6.3% and 5%, respectively, on a year-over-year basis.
Price Performance
Universal Health's stock has gained 20.6% compared with the industry’s 20.4% growth over the year-to-date period. Additionally, the stock outperformed the Medical sector and S&P 500 Index's respective growth of 7% and 16.1% during the same period.
Image Source: Zacks Investment Research
Conclusion
Universal Health demonstrates competitive strengths through its diversified healthcare services portfolio, encompassing both Acute Care Hospital Services and Behavioral Health Care Services segments. Increased adjusted admissions and patient days bolster revenue growth. Moreover, its extensive network and continued investment in high-demand healthcare services ensure resilience and sustained market presence, thereby making the stock a compelling investment opportunity now.
Other Stocks to Consider
Here are some companies from the Medical space, which according to our model, also have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for HIMS’ second-quarter 2024 earnings is pegged at 5 cents per share. A loss of 3 cents per share was reported in the prior-year quarter.
Hims & Hers’ earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 79.17%.
HCA Healthcare, Inc. (HCA - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank of 2, at present. The Zacks Consensus Estimate for HCA’s second-quarter earnings is pegged at $4.97 per share, which implies a 15.9% rise from the year-ago quarter’s reported figure.
HCA Healthcare’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 5.64%.
Penumbra, Inc. (PEN - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank of 2, at present. The Zacks Consensus Estimate for PEN’s second-quarter earnings is pegged at 56 cents per share, which indicates an improvement of 30.2% from the year-ago quarter’s reported figure.
Penumbra’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 25.97%.
Image: Bigstock
Will Patient Volumes Drive Universal Health's (UHS) Q2 Earnings?
Universal Health Services, Inc. (UHS - Free Report) is scheduled to report second-quarter 2024 results on Jul 24, after the closing bell.
Q2 Estimates
The Zacks Consensus Estimate for UHS’ second-quarter earnings per share is pegged at $3.37, which implies a 33.2% rise from the year-ago quarter’s reported figure. The estimate was revised upward by one analyst over the past month against no movement in the opposite direction. During this time, the estimate has gained 2.4%.
The consensus mark for revenues is $3.8 billion, indicating 8.5% growth from the year-ago quarter’s tally.
Image Source: Zacks Investment Research
Earnings Surprise History
Universal Health boasts an impressive earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 8.12%.
Image Source: Zacks Investment Research
What our Quantitative Model Unveils
Our proven model predicts an earnings beat for Universal Health this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
Earnings ESP: Universal Health has an Earnings ESP of +8.65% because the Most Accurate Estimate of $3.66 is pegged higher than the Zacks Consensus Estimate of $3.37. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: UHS currently carries a Zacks Rank of 2.
Now, let’s see how things have shaped up before the second-quarter earnings announcement.
Factors to Note
The top line of Universal Health is likely to have been bolstered by significant contributions from its Acute Care Hospital Services and Behavioral Health Care Services segments in the second quarter.
The Acute Care Hospital Services unit is expected to have been driven by an increase in adjusted admissions and higher net revenue per adjusted admission. However, elevated salaries, wages and benefits are likely to have hurt the overall performance of the unit.
The Zacks Consensus Estimate for net revenues in the Acute Care Hospital Services segment is pegged at $2.2 billion, indicating an 8.4% increase from the prior-year quarter’s reported figure. We estimate the metric to witness 7.4% year-over-year growth. Our estimate for the unit’s same-facility adjusted admissions indicates 5.4% growth from the prior-year quarter.
The Behavioral Health Care Services segment is likely to have gained from sustained demand for behavioral healthcare services amid the continued incidence of mental health issues among Americans. Furthermore, growth in adjusted patient days and revenue per adjusted patient day is expected to have benefited the unit’s performance.
The Zacks Consensus Estimate for net revenues in the Behavioral Health Care Services segment is pegged at $1.7 billion, which implies an 8.4% rise from the year-ago quarter’s reported figure. We estimate the metric to improve 7.6% year over year. Our estimate for the unit’s adjusted patient days indicates 1.9% year-over-year growth.
However, Universal Health’s margins are likely to have been affected by an escalating overall expense level, resulting from higher salaries, wages and benefits, along with a rise in supplies expenses in the second quarter. We expect salaries, wages and benefits, and supplies expenses to increase 6.3% and 5%, respectively, on a year-over-year basis.
Price Performance
Universal Health's stock has gained 20.6% compared with the industry’s 20.4% growth over the year-to-date period. Additionally, the stock outperformed the Medical sector and S&P 500 Index's respective growth of 7% and 16.1% during the same period.
Image Source: Zacks Investment Research
Conclusion
Universal Health demonstrates competitive strengths through its diversified healthcare services portfolio, encompassing both Acute Care Hospital Services and Behavioral Health Care Services segments. Increased adjusted admissions and patient days bolster revenue growth. Moreover, its extensive network and continued investment in high-demand healthcare services ensure resilience and sustained market presence, thereby making the stock a compelling investment opportunity now.
Other Stocks to Consider
Here are some companies from the Medical space, which according to our model, also have the right combination of elements to beat on earnings this time around:
Hims & Hers Health, Inc. (HIMS - Free Report) currently has an Earnings ESP of +19.28% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HIMS’ second-quarter 2024 earnings is pegged at 5 cents per share. A loss of 3 cents per share was reported in the prior-year quarter.
Hims & Hers’ earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 79.17%.
HCA Healthcare, Inc. (HCA - Free Report) has an Earnings ESP of +7.10% and a Zacks Rank of 2, at present. The Zacks Consensus Estimate for HCA’s second-quarter earnings is pegged at $4.97 per share, which implies a 15.9% rise from the year-ago quarter’s reported figure.
HCA Healthcare’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 5.64%.
Penumbra, Inc. (PEN - Free Report) has an Earnings ESP of +0.08% and a Zacks Rank of 2, at present. The Zacks Consensus Estimate for PEN’s second-quarter earnings is pegged at 56 cents per share, which indicates an improvement of 30.2% from the year-ago quarter’s reported figure.
Penumbra’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 25.97%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.