Tenet Healthcare THC, a current Zacks Rank #1 (Strong Buy), is a healthcare services company that owns and operates general hospitals and related healthcare facilities for urban and rural communities in numerous states.
The company’s earnings outlook has shifted positively across the board, a bullish sign for near-term share movement.
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 10% of all Zacks industries. Let’s take a closer look at how the company currently stacks up.
Tenet Healthcare Raises Guidance
Tenet Healthcare shares have been scorching-hot in 2024, up 115% and even outperforming many of the Mag 7 members. Favorable quarterly results have helped keep shares moving higher all year long, moving higher again following the latest print that revealed an adjusted EBITDA guidance upgrade.
Image Source: Zacks Investment Research
The company’s cash-generating abilities also saw a positive boost throughout the latest period, with free cash flow of $1.8 billion nearly 80% higher than the year-ago figure. And to the likes of shareholders, the company continued to aggressively buy back its shares throughout the period, scooping up $124 million worth.
As shown below, THC has regularly bought its shares back over recent years, helping establish a small floor.
Image Source: Zacks Investment Research
The valuation picture here isn’t expensive, with the current 14.1X forward 12-month earnings multiple a few ticks above the 12.2X five-year median but otherwise nowhere near the 18.7X five-year high. And the current PEG ratio works out to 0.7X, reflective of both growth and value. The stock sports a Style Score of ‘A’ for Value.
Saum Sutaria, CEO, wrapped up the quarterly release with a bullish statement:
‘Our businesses continue to produce strong results and generate robust free cash flow with same store revenue growth and profitability well above our expectations due to the focused execution of our strategy and disciplined operations,’
He continued –
‘We have furthered our portfolio transformation and are well-positioned to deliver enhanced value to our patients, physician partners, and shareholders.’
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 would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
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