Hospital Chains Stocks Q1 In Review: Universal Health Services (NYSE:UHS) Vs Peers

As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the hospital chains industry, including Universal Health Services (NYSE:UHS) and its peers.

Hospital chains operate scale-driven businesses that rely on patient volumes, efficient operations, and favorable payer contracts to drive revenue and profitability. These organizations benefit from the essential nature of their services, which ensures consistent demand, particularly as populations age and chronic diseases become more prevalent. However, profitability can be pressured by rising labor costs, regulatory requirements, and the challenges of balancing care quality with cost efficiency. Dependence on government and private insurance reimbursements also introduces financial uncertainty. Looking ahead, hospital chains stand to benefit from tailwinds such as increasing healthcare utilization driven by an aging population that generally has higher incidents of disease. AI can also be a tailwind in areas such as predictive analytics for more personalized treatment and efficiency (intake, staffing, resourcing allocation). However, the sector faces potential headwinds such as labor shortages that could push up wages as well as substantial investments needs for digital infrastructure to support telehealth and electronic health records. Regulatory scrutiny, and reimbursement cuts are also looming topics that could further strain margins.

The 4 hospital chains stocks we track reported a satisfactory Q1. As a group, revenues were in line with analysts’ consensus estimates.

Luckily, hospital chains stocks have performed well with share prices up 12% on average since the latest earnings results.

Weakest Q1: Universal Health Services (NYSE:UHS)

With a network spanning 39 states and three countries, Universal Health Services (NYSE:UHS) operates acute care hospitals and behavioral health facilities across the United States, United Kingdom, and Puerto Rico.

Universal Health Services reported revenues of $4.1 billion, up 6.7% year on year. This print fell short of analysts’ expectations by 1%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ EPS estimates but same-store sales in line with analysts’ estimates.

Universal Health Services scored the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 9.8% since reporting and currently trades at $190.15.

Read our full report on Universal Health Services here, it’s free.

Best Q1: Tenet Healthcare (NYSE:THC)

With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE:THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services.

Tenet Healthcare reported revenues of $5.22 billion, down 2.7% year on year, outperforming analysts’ expectations by 1.3%. The business had a strong quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.

Tenet Healthcare achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 31.6% since reporting. It currently trades at $162.83.

Is now the time to buy Tenet Healthcare? Access our full analysis of the earnings results here, it’s free.

HCA Healthcare (NYSE:HCA)

With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE:HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.

HCA Healthcare reported revenues of $18.32 billion, up 5.7% year on year, exceeding analysts’ expectations by 0.5%. Still, it was a mixed quarter as it posted a slight miss of analysts’ same-store sales estimates.

HCA Healthcare delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 11.6% since the results and currently trades at $381.20.

Read our full analysis of HCA Healthcare’s results here.

Acadia Healthcare (NASDAQ:ACHC)

With a network of over 250 facilities serving patients in 38 states and Puerto Rico, Acadia Healthcare (NASDAQ:ACHC) operates facilities providing mental health and substance use disorder treatment services across the United States.

Acadia Healthcare reported revenues of $770.5 million, flat year on year. This number was in line with analysts’ expectations. It was a strong quarter as it also produced a solid beat of analysts’ sales volume estimates and an impressive beat of analysts’ EPS estimates.

Acadia Healthcare delivered the highest full-year guidance raise among its peers. The stock is down 4.9% since reporting and currently trades at $24.60.

Read our full, actionable report on Acadia Healthcare here, it’s free.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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