TENET HEALTHCARE CORP (THC) Stock Fundamental Analysis
NYSE:THC - New York Stock Exchange, Inc. - US88033G4073 - Common Stock - Currency: USD
THC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 103 industry peers in the Health Care Providers & Services industry. THC scores excellent on profitability, but there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on THC.
1. Profitability
1.1 Basic Checks
THC had positive earnings in the past year.
In the past year THC had a positive cash flow from operations.
Each year in the past 5 years THC has been profitable.
Each year in the past 5 years THC had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 4.98%, THC is doing good in the industry, outperforming 78.64% of the companies in the same industry.
THC has a Return On Equity of 34.80%. This is amongst the best in the industry. THC outperforms 97.09% of its industry peers.
THC has a better Return On Invested Capital (10.80%) than 84.47% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for THC is in line with the industry average of 9.71%.
The last Return On Invested Capital (10.80%) for THC is above the 3 year average (9.25%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.98% | ||
| ROE | 34.8% | ||
| ROIC | 10.8% |
ROA(3y)4.91%
ROA(5y)3.9%
ROE(3y)50.24%
ROE(5y)332.92%
ROIC(3y)9.25%
ROIC(5y)8.01%
1.3 Margins
The Profit Margin of THC (7.09%) is better than 86.41% of its industry peers.
In the last couple of years the Profit Margin of THC has grown nicely.
THC's Operating Margin of 16.46% is amongst the best of the industry. THC outperforms 91.26% of its industry peers.
In the last couple of years the Operating Margin of THC has grown nicely.
THC has a Gross Margin of 82.33%. This is amongst the best in the industry. THC outperforms 95.15% of its industry peers.
THC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.46% | ||
| PM (TTM) | 7.09% | ||
| GM | 82.33% |
OM growth 3Y10.99%
OM growth 5Y11.36%
PM growth 3Y48.9%
PM growth 5YN/A
GM growth 3Y-0.23%
GM growth 5Y-0.27%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), THC is creating some value.
The number of shares outstanding for THC has been reduced compared to 1 year ago.
THC has less shares outstanding than it did 5 years ago.
THC has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.78, we must say that THC is in the distress zone and has some risk of bankruptcy.
THC has a Altman-Z score (1.78) which is in line with its industry peers.
The Debt to FCF ratio of THC is 9.33, which is on the high side as it means it would take THC, 9.33 years of fcf income to pay off all of its debts.
THC has a Debt to FCF ratio (9.33) which is in line with its industry peers.
A Debt/Equity ratio of 3.13 is on the high side and indicates that THC has dependencies on debt financing.
With a Debt to Equity ratio value of 3.13, THC is not doing good in the industry: 78.64% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.13 | ||
| Debt/FCF | 9.33 | ||
| Altman-Z | 1.78 |
ROIC/WACC1.31
WACC8.24%
2.3 Liquidity
A Current Ratio of 1.78 indicates that THC should not have too much problems paying its short term obligations.
THC has a Current ratio of 1.78. This is in the better half of the industry: THC outperforms 64.08% of its industry peers.
THC has a Quick Ratio of 1.70. This is a normal value and indicates that THC is financially healthy and should not expect problems in meeting its short term obligations.
THC has a better Quick ratio (1.70) than 63.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.78 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 48.52% over the past year.
Measured over the past years, THC shows a very strong growth in Earnings Per Share. The EPS has been growing by 34.84% on average per year.
The Revenue has decreased by -1.79% in the past year.
THC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.26% yearly.
EPS 1Y (TTM)48.52%
EPS 3Y16.22%
EPS 5Y34.84%
EPS Q2Q%35.4%
Revenue 1Y (TTM)-1.79%
Revenue growth 3Y1.98%
Revenue growth 5Y2.26%
Sales Q2Q%-2.7%
3.2 Future
THC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.82% yearly.
Based on estimates for the next years, THC will show a small growth in Revenue. The Revenue will grow by 3.03% on average per year.
EPS Next Y8.8%
EPS Next 2Y7.99%
EPS Next 3Y9.7%
EPS Next 5Y13.82%
Revenue Next Year0.61%
Revenue Next 2Y2.78%
Revenue Next 3Y3.63%
Revenue Next 5Y3.03%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
THC is valuated correctly with a Price/Earnings ratio of 13.63.
Based on the Price/Earnings ratio, THC is valued cheaply inside the industry as 82.52% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of THC to the average of the S&P500 Index (27.52), we can say THC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 12.81, the valuation of THC can be described as correct.
Based on the Price/Forward Earnings ratio, THC is valued a bit cheaper than 79.61% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.58, THC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.63 | ||
| Fwd PE | 12.81 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, THC is valued cheaply inside the industry as 88.35% of the companies are valued more expensively.
82.52% of the companies in the same industry are more expensive than THC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.69 | ||
| EV/EBITDA | 6.32 |
4.3 Compensation for Growth
THC's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of THC may justify a higher PE ratio.
PEG (NY)1.55
PEG (5Y)0.39
EPS Next 2Y7.99%
EPS Next 3Y9.7%
5. Dividend
5.1 Amount
No dividends for THC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
177.74
+1.99 (+1.13%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners98.8%
Inst Owner Change-0.04%
Ins Owners0.73%
Ins Owner Change2.46%
Market Cap16.51B
Analysts81.43
Price Target189.73 (6.75%)
Short Float %4.51%
Short Ratio2.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.17%
Min EPS beat(2)14.55%
Max EPS beat(2)37.79%
EPS beat(4)4
Avg EPS beat(4)23.81%
Min EPS beat(4)14.55%
Max EPS beat(4)37.79%
EPS beat(8)8
Avg EPS beat(8)39.71%
EPS beat(12)12
Avg EPS beat(12)41.82%
EPS beat(16)16
Avg EPS beat(16)50.32%
Revenue beat(2)1
Avg Revenue beat(2)-1.14%
Min Revenue beat(2)-2.85%
Max Revenue beat(2)0.58%
Revenue beat(4)3
Avg Revenue beat(4)-0.23%
Min Revenue beat(4)-2.85%
Max Revenue beat(4)0.99%
Revenue beat(8)6
Avg Revenue beat(8)0.65%
Revenue beat(12)8
Avg Revenue beat(12)0.23%
Revenue beat(16)10
Avg Revenue beat(16)0.11%
PT rev (1m)2.95%
PT rev (3m)8.22%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)8.68%
EPS NY rev (1m)1.47%
EPS NY rev (3m)5.26%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)0.4%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.63 | ||
| Fwd PE | 12.81 | ||
| P/S | 0.8 | ||
| P/FCF | 11.69 | ||
| P/OCF | 7.25 | ||
| P/B | 3.95 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.32 |
EPS(TTM)13.04
EY7.34%
EPS(NY)13.88
Fwd EY7.81%
FCF(TTM)15.2
FCFY8.55%
OCF(TTM)24.5
OCFY13.79%
SpS220.91
BVpS45.01
TBVpS-86.18
PEG (NY)1.55
PEG (5Y)0.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.98% | ||
| ROE | 34.8% | ||
| ROCE | 13.62% | ||
| ROIC | 10.8% | ||
| ROICexc | 12.29% | ||
| ROICexgc | 27.88% | ||
| OM | 16.46% | ||
| PM (TTM) | 7.09% | ||
| GM | 82.33% | ||
| FCFM | 6.88% |
ROA(3y)4.91%
ROA(5y)3.9%
ROE(3y)50.24%
ROE(5y)332.92%
ROIC(3y)9.25%
ROIC(5y)8.01%
ROICexc(3y)10.01%
ROICexc(5y)8.76%
ROICexgc(3y)21.74%
ROICexgc(5y)18.93%
ROCE(3y)11.67%
ROCE(5y)10.11%
ROICexcg growth 3Y12.5%
ROICexcg growth 5Y15.11%
ROICexc growth 3Y10.5%
ROICexc growth 5Y10.87%
OM growth 3Y10.99%
OM growth 5Y11.36%
PM growth 3Y48.9%
PM growth 5YN/A
GM growth 3Y-0.23%
GM growth 5Y-0.27%
F-Score5
Asset Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.13 | ||
| Debt/FCF | 9.33 | ||
| Debt/EBITDA | 3.12 | ||
| Cap/Depr | 105.88% | ||
| Cap/Sales | 4.21% | ||
| Interest Coverage | 4.29 | ||
| Cash Conversion | 54.28% | ||
| Profit Quality | 97.04% | ||
| Current Ratio | 1.78 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 1.78 |
F-Score5
WACC8.24%
ROIC/WACC1.31
Cap/Depr(3y)96.91%
Cap/Depr(5y)86.14%
Cap/Sales(3y)4.04%
Cap/Sales(5y)3.71%
Profit Quality(3y)126.2%
Profit Quality(5y)239.34%
High Growth Momentum
Growth
EPS 1Y (TTM)48.52%
EPS 3Y16.22%
EPS 5Y34.84%
EPS Q2Q%35.4%
EPS Next Y8.8%
EPS Next 2Y7.99%
EPS Next 3Y9.7%
EPS Next 5Y13.82%
Revenue 1Y (TTM)-1.79%
Revenue growth 3Y1.98%
Revenue growth 5Y2.26%
Sales Q2Q%-2.7%
Revenue Next Year0.61%
Revenue Next 2Y2.78%
Revenue Next 3Y3.63%
Revenue Next 5Y3.03%
EBIT growth 1Y13.7%
EBIT growth 3Y13.18%
EBIT growth 5Y13.88%
EBIT Next Year32.48%
EBIT Next 3Y14.24%
EBIT Next 5Y9.71%
FCF growth 1Y205.63%
FCF growth 3Y7.04%
FCF growth 5Y14.67%
OCF growth 1Y74.54%
OCF growth 3Y9.29%
OCF growth 5Y10.67%