Is it Time to Hold on to Community Health Systems Stock?

Community Health Systems, Inc. CYH remains a stock worth holding, backed by growing occupancy, revenue per admission and business streamlining efforts. With the aging U.S. population fueling demand for healthcare services, the Franklin, TN-based operator of general acute care hospitals and outpatient facilities is positioned for steady growth. The company currently carries a market cap of $392.3 million.

Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.

Growth Drivers

Community Health continues to focus on investing in high-return markets, which should help capture rising healthcare demand. Occupancy rates have steadily improved, reaching 52.5% in 2024 and averaging 53.4% in the first half of 2025. We expect this to climb to 54.8% by year-end.

Revenue per adjusted admission is trending higher, helping offset softer admissions volumes. To streamline operations, CYH has been actively divesting non-core assets, including the $260 million sale of Florida hospitals to AdventHealth in early 2025. The company is also pursuing the sale of a three-hospital portfolio in Pennsylvania after an earlier deal collapsed.

The company’s cash flow situation is expected to strengthen this year. Net operating cash flow is forecasted within $600-$700 million for 2025, up from $480 million last year, reflecting growing strength in operations.

Zacks Estimates for CYH

Analysts see a sharp rebound ahead. The Zacks Consensus Estimate calls for a 67% earnings improvement in 2025 from last year’s loss of 34 cents per share, followed by another 45.6% gain in 2026. Revenue estimates stand at $12.4 billion for 2025 and $12.7 billion for 2026.

Still, the stock has slipped 6.4% year-to-date, compared with a 27.6% rally in the broader industry. On valuation, CYH trades at a forward 12-month price-to-sales ratio of just 0.03X, far below the industry average of 0.83X. CYH carries a Value Score of A.

Community Health Systems, Inc. Price and Consensus

Community Health Systems, Inc. price-consensus-chart | Community Health Systems, Inc. Quote

Key Concerns

There are a few factors that investors should keep an eye on.

Balance sheet weakness can affect Community Health's financial flexibility. It exited the second quarter with cash and cash equivalents of $456 million, while long-term debt amounted to $10.8 billion. Its net debt-to-EBITDA of 8.3% is higher than the industry average of 3.3%. Profitability also lags, with return on invested capital at 6.5% versus the industry’s 13.4%. Nevertheless, we believe that a systematic and strategic plan of action will drive long-term growth.

Better-Ranked Players

Some better-ranked stocks in the Medical space include Tenet Healthcare Corporation THC and Encompass Health Corporation EHC. While Tenet Healthcare sports a Zacks Rank #1 (Strong Buy) at present, Encompass Health carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Tenet Healthcare’s 2025 full-year earnings indicates a 30.8% year-over-year increase. It beat earnings estimates in each of the past four quarters, with an average surprise of 31.2%. Also, the consensus mark for Tenet Healthcare’s 2025 full-year revenues suggests 2.4% year-over-year growth.

The consensus mark for Encompass Health’s 2025 full-year earnings indicates 18.3% year-over-year growth. The earnings estimate has witnessed seven upward estimate revisions in the past month, against no movement in the opposite direction. Furthermore, the consensus estimate for Encompass Health’s 2025 full-year revenues suggests 10.2% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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