NYSE:HCA appears to be flying under the radar despite its strong fundamentals.

Last update: Jul 3, 2024

Our stock screening tool has pinpointed HCA HEALTHCARE INC (NYSE:HCA) as an undervalued stock. NYSE:HCA maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Unpacking NYSE:HCA's Valuation Rating

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:HCA has received a 7 out of 10:

HCA's Price/Earnings ratio is a bit cheaper when compared to the industry. HCA is cheaper than 79.65% of the companies in the same industry.
HCA is valuated rather cheaply when we compare the Price/Earnings ratio to 28.32, which is the current average of the S&P500 Index.
77.88% of the companies in the same industry are more expensive than HCA, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.13, HCA is valued a bit cheaper.
HCA's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HCA is cheaper than 80.53% of the companies in the same industry.
HCA's Price/Free Cash Flow ratio is rather cheap when compared to the industry. HCA is cheaper than 85.84% of the companies in the same industry.
The excellent profitability rating of HCA may justify a higher PE ratio.
HCA's earnings are expected to grow with 12.24% in the coming years. This may justify a more expensive valuation.

How do we evaluate the Profitability for NYSE:HCA?

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:HCA was assigned a score of 8 for profitability:

HCA's Return On Assets of 9.60% is amongst the best of the industry. HCA outperforms 94.69% of its industry peers.
HCA has a better Return On Invested Capital (17.66%) than 96.46% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HCA is significantly above the industry average of 8.87%.
HCA has a Profit Margin of 8.20%. This is amongst the best in the industry. HCA outperforms 92.04% of its industry peers.
With an excellent Operating Margin value of 14.62%, HCA belongs to the best of the industry, outperforming 94.69% of the companies in the same industry.
With an excellent Gross Margin value of 84.79%, HCA belongs to the best of the industry, outperforming 97.35% of the companies in the same industry.

Understanding NYSE:HCA's Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:HCA, the assigned 5 reflects its health status:

Looking at the Altman-Z score, with a value of 2.61, HCA is in the better half of the industry, outperforming 67.26% of the companies in the same industry.
HCA has a better Debt to FCF ratio (7.40) than 70.80% of its industry peers.

Exploring NYSE:HCA's Growth

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:HCA boasts a 5 out of 10:

The Earnings Per Share has grown by an nice 15.89% over the past year.
Measured over the past years, HCA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.82% on average per year.
HCA shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.59%.
HCA is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.65% yearly.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of HCA

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.