It has been about a month since the last earnings report for Universal Health Services (UHS). Shares have added about 11.1% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Universal Health Services due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Universal Health's Q3 Earnings Top on Patient Volumes, Ups '25 EPS View
Universal Health reported third-quarter 2025 adjusted earnings per share (EPS) of $5.69, which outpaced the Zacks Consensus Estimate by 22.1%. The bottom line soared 53.4% year over year.
Net revenues of $4.5 billion improved 13.4% year over year. The top line beat the consensus mark by 4.2%.
The quarterly results benefited from strong top-line growth driven by robust performance in both Acute Care and Behavioral Health segments. Increased adjusted admissions and improved patient days boosted segmental revenues. However, the upside was partly offset by elevated operating costs.
UHS’ Quarterly Operational Update
Adjusted EBITDA, net of NCI, rose 27.4% year over year to $670.6 million, higher than our estimate of $577.4 million.
Total operating costs came in at $4 billion, which escalated 11% year over year in the quarter under review due to higher salaries, wages and benefits, supplies and other operating expenses. The metric came higher than our estimate of $3.9 billion.
UHS’ Segmental Update
Acute Care Hospital Services
Adjusted admissions (adjusted for outpatient activity) grew 2% on a same-facility basis in the third quarter. Adjusted patient days inched up 0.4% year over year, while net revenue per adjusted admission advanced 9.8%. Net revenues stemming from Universal Health’s acute care services improved 12.8% on a same-facility basis.
Behavioral Health Care Services
Adjusted admissions inched up 0.5% on a same-facility basis. Adjusted patient days rose 1.3% on a same-facility basis, while net revenue per adjusted patient day advanced 7.9%. Net revenues derived from UHS’ behavioral healthcare services improved 9.3% on a same-facility basis.
Financial Update of UHS (As of Sept. 30, 2025)
Universal Health exited the third quarter with cash and cash equivalents of $112.9 million, which fell 10.4% from the 2024-end level. As part of its $1.3 billion revolving credit facility, net of outstanding borrowings and letters of credit, there remains an aggregate available borrowing capacity of $965 million at the third-quarter end.
Total assets of $15.3 billion increased 6% from the figure at 2024-end.
Long-term debt amounted to $4 billion, which declined 11.5% from the prior-year comparable period. Current maturities of long-term debt totaled $740.2 million.
Total equity of $7.2 billion advanced 7.1% from the 2024-end figure.
UHS generated cash flows from operations of $1.3 billion for the first nine months of 2025, which slipped 8.4% from the prior-year comparable period.
UHS’ Share Repurchase Update
Universal Health bought back shares worth around $234.3 million in the third quarter.
On Oct. 27, 2025, management approved a $1.5 billion increase to the existing stock repurchase program. Including this latest authorization, the total remaining authorization available under the program now stands at $1.8 billion.
2025 Guidance of Universal Health Revised
Management currently forecasts net revenues within $17.306-$17.445 billion, higher than the earlier view of $17.096-$17.312 billion. The mid-point of the revised guidance implies 9.8% growth from the 2024 figure.
Adjusted EBITDA, net of NCI, is now anticipated to be in the range of $2.569-$2.619 billion, up from the previous forecast of $2.458-$2.543 billion. Adjusted net income attributable to UHS is forecasted within $1.382-$1.420 billion.
EPS is presently expected in the band of $21.50-$22.10, higher than the earlier guidance of $20-$21. The mid-point of the revised outlook suggests 31.2% growth from the 2024 figure.
Depreciation and amortization expenses are anticipated to be $617.4 million. Interest expenses are estimated at $151.9 million. Provisions for income taxes are expected in the range of $434.352-$446.316 million.
Capital expenditures were earlier expected to be between $850 million and $1 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Universal Health Services has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of A on the value side, putting it in the top quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Universal Health Services has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Universal Health Services, Inc. (UHS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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