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 102 industry peers in the Health Care Providers & Services industry. THC scores excellent on profitability, but there are some minor concerns on its financial health. THC scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year THC was profitable.
THC had a positive operating cash flow in the past year.
Each year in the past 5 years THC has been profitable.
In the past 5 years THC always reported a positive cash flow from operatings.
1.2 Ratios
THC has a Return On Assets of 4.98%. This is in the better half of the industry: THC outperforms 78.43% of its industry peers.
The Return On Equity of THC (34.80%) is better than 97.06% of its industry peers.
THC's Return On Invested Capital of 10.80% is amongst the best of the industry. THC outperforms 84.31% of its industry peers.
THC had an Average Return On Invested Capital over the past 3 years of 9.25%. This is in line with the industry average of 9.62%.
The 3 year average ROIC (9.25%) for THC is below the current ROIC(10.80%), indicating increased profibility in the last year.
| 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
Looking at the Profit Margin, with a value of 7.09%, THC belongs to the top of the industry, outperforming 86.27% of the companies in the same industry.
In the last couple of years the Profit Margin of THC has grown nicely.
With an excellent Operating Margin value of 16.46%, THC belongs to the best of the industry, outperforming 91.18% of the companies in the same industry.
In the last couple of years the Operating Margin of THC has grown nicely.
Looking at the Gross Margin, with a value of 82.33%, THC belongs to the top of the industry, outperforming 96.08% of the companies in the same industry.
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
THC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for THC has been reduced compared to 1 year ago.
Compared to 5 years ago, THC has less shares outstanding
Compared to 1 year ago, THC has an improved debt to assets ratio.
2.2 Solvency
THC has an Altman-Z score of 1.75. This is a bad value and indicates that THC is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.75, THC perfoms like the industry average, outperforming 41.18% of the companies in the same industry.
THC has a debt to FCF ratio of 9.33. This is a negative value and a sign of low solvency as THC would need 9.33 years to pay back of all of its debts.
With a Debt to FCF ratio value of 9.33, THC perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
THC has a Debt/Equity ratio of 3.13. This is a high value indicating a heavy dependency on external financing.
THC has a worse Debt to Equity ratio (3.13) than 77.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.13 | ||
| Debt/FCF | 9.33 | ||
| Altman-Z | 1.75 |
ROIC/WACC1.31
WACC8.23%
2.3 Liquidity
A Current Ratio of 1.78 indicates that THC should not have too much problems paying its short term obligations.
With a decent Current ratio value of 1.78, THC is doing good in the industry, outperforming 65.69% of the companies in the same industry.
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's Quick ratio of 1.70 is fine compared to the rest of the industry. THC outperforms 64.71% 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.
The Earnings Per Share has been growing by 34.84% on average over the past years. This is a very strong growth
Looking at the last year, THC shows a decrease in Revenue. The Revenue has decreased by -1.79% in the last year.
Measured over the past years, THC shows a small growth in Revenue. The Revenue has been growing by 2.26% on average per year.
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
The Earnings Per Share is expected to grow by 14.32% on average over the next years. This is quite good.
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 Y7.22%
EPS Next 2Y8.18%
EPS Next 3Y10.01%
EPS Next 5Y14.32%
Revenue Next Year0.6%
Revenue Next 2Y2.78%
Revenue Next 3Y3.61%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 12.84, THC is valued correctly.
THC's Price/Earnings ratio is rather cheap when compared to the industry. THC is cheaper than 84.31% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.32. THC is valued rather cheaply when compared to this.
THC is valuated correctly with a Price/Forward Earnings ratio of 12.02.
Based on the Price/Forward Earnings ratio, THC is valued cheaply inside the industry as 82.35% of the companies are valued more expensively.
THC's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.19.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.84 | ||
| Fwd PE | 12.02 |
4.2 Price Multiples
THC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. THC is cheaper than 90.20% of the companies in the same industry.
84.31% 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 | 11.02 | ||
| EV/EBITDA | 6.06 |
4.3 Compensation for Growth
The 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)1.78
PEG (5Y)0.37
EPS Next 2Y8.18%
EPS Next 3Y10.01%
5. Dividend
5.1 Amount
THC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
167.46
+3.22 (+1.96%)
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 Change0.11%
Ins Owners0.73%
Ins Owner Change2.45%
Market Cap15.56B
Analysts80.74
Price Target184.29 (10.05%)
Short Float %3.05%
Short Ratio1.66
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)3.99%
PT rev (3m)3.97%
EPS NQ rev (1m)1.78%
EPS NQ rev (3m)8.91%
EPS NY rev (1m)0%
EPS NY rev (3m)5.34%
Revenue NQ rev (1m)0.15%
Revenue NQ rev (3m)0.19%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.84 | ||
| Fwd PE | 12.02 | ||
| P/S | 0.76 | ||
| P/FCF | 11.02 | ||
| P/OCF | 6.83 | ||
| P/B | 3.72 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.06 |
EPS(TTM)13.04
EY7.79%
EPS(NY)13.93
Fwd EY8.32%
FCF(TTM)15.2
FCFY9.08%
OCF(TTM)24.5
OCFY14.63%
SpS220.91
BVpS45.01
TBVpS-86.18
PEG (NY)1.78
PEG (5Y)0.37
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 | 1.75 |
F-Score5
WACC8.23%
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 Y7.22%
EPS Next 2Y8.18%
EPS Next 3Y10.01%
EPS Next 5Y14.32%
Revenue 1Y (TTM)-1.79%
Revenue growth 3Y1.98%
Revenue growth 5Y2.26%
Sales Q2Q%-2.7%
Revenue Next Year0.6%
Revenue Next 2Y2.78%
Revenue Next 3Y3.61%
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%