TENET HEALTHCARE CORP (THC) Stock Fundamental Analysis
NYSE:THC - New York Stock Exchange, Inc. - US88033G4073 - Common Stock - Currency: USD
Overall THC gets a fundamental rating of 6 out of 10. We evaluated THC against 107 industry peers in the Health Care Providers & Services industry. THC has an excellent profitability rating, 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.
In the past 5 years THC has always been profitable.
Each year in the past 5 years THC had a positive operating cash flow.
1.2 Ratios
The Return On Assets of THC (11.06%) is better than 95.37% of its industry peers.
The Return On Equity of THC (76.72%) is better than 97.22% of its industry peers.
With an excellent Return On Invested Capital value of 10.35%, THC belongs to the best of the industry, outperforming 85.19% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for THC is in line with the industry average of 8.16%.
The 3 year average ROIC (9.25%) for THC is below the current ROIC(10.35%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.06% | ||
| ROE | 76.72% | ||
| ROIC | 10.35% |
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 15.49%, THC belongs to the top of the industry, outperforming 97.22% of the companies in the same industry.
THC's Profit Margin has improved in the last couple of years.
THC's Operating Margin of 15.56% is amongst the best of the industry. THC outperforms 92.59% of its industry peers.
THC's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 82.35%, THC belongs to the best of the industry, outperforming 94.44% of the companies in the same industry.
In the last couple of years the Gross Margin of THC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.56% | ||
| PM (TTM) | 15.49% | ||
| GM | 82.35% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so THC is still creating some value.
Compared to 1 year ago, THC has less shares outstanding
THC has less shares outstanding than it did 5 years ago.
The debt/assets ratio for THC has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.66, we must say that THC is in the distress zone and has some risk of bankruptcy.
THC has a Altman-Z score (1.66) which is in line with its industry peers.
The Debt to FCF ratio of THC is 11.80, which is on the high side as it means it would take THC, 11.80 years of fcf income to pay off all of its debts.
THC's Debt to FCF ratio of 11.80 is in line compared to the rest of the industry. THC outperforms 51.85% of its industry peers.
A Debt/Equity ratio of 3.14 is on the high side and indicates that THC has dependencies on debt financing.
THC's Debt to Equity ratio of 3.14 is on the low side compared to the rest of the industry. THC is outperformed by 77.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.14 | ||
| Debt/FCF | 11.8 | ||
| Altman-Z | 1.66 |
ROIC/WACC1.27
WACC8.14%
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 64.81% 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.
Looking at the Quick ratio, with a value of 1.70, THC is in the better half of the industry, outperforming 64.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.78 | ||
| Quick Ratio | 1.7 |
3. Growth
3.1 Past
THC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 70.49%, which is quite impressive.
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 small growth in Revenue. The Revenue has grown by 0.57% in the last year.
The Revenue has been growing slightly by 2.26% on average over the past years.
EPS 1Y (TTM)70.49%
EPS 3Y16.22%
EPS 5Y34.84%
EPS Q2Q%28.36%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y1.98%
Revenue growth 5Y2.26%
Sales Q2Q%-5.71%
3.2 Future
Based on estimates for the next years, THC will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.36% on average per year.
Based on estimates for the next years, THC will show a small growth in Revenue. The Revenue will grow by 4.47% on average per year.
EPS Next Y1.78%
EPS Next 2Y5.41%
EPS Next 3Y8.8%
EPS Next 5Y8.36%
Revenue Next Year0.63%
Revenue Next 2Y2.85%
Revenue Next 3Y3.73%
Revenue Next 5Y4.47%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last 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
Based on the Price/Earnings ratio of 10.71, the valuation of THC can be described as reasonable.
Based on the Price/Earnings ratio, THC is valued cheaply inside the industry as 88.89% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 29.35. THC is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 10.53 indicates a reasonable valuation of THC.
THC's Price/Forward Earnings ratio is rather cheap when compared to the industry. THC is cheaper than 87.96% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.10, THC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.71 | ||
| Fwd PE | 10.53 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, THC is valued cheaply inside the industry as 90.74% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, THC is valued cheaper than 85.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.87 | ||
| EV/EBITDA | 5.52 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates THC does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of THC may justify a higher PE ratio.
PEG (NY)6.01
PEG (5Y)0.31
EPS Next 2Y5.41%
EPS Next 3Y8.8%
5. Dividend
5.1 Amount
THC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
127.49
+2.05 (+1.63%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners97.23%
Inst Owner Change0.94%
Ins Owners0.81%
Ins Owner Change4.02%
Market Cap12.13B
Analysts80.77
Price Target177.25 (39.03%)
Short Float %3.67%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
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)18.45%
Min EPS beat(2)14.55%
Max EPS beat(2)22.34%
EPS beat(4)4
Avg EPS beat(4)45.22%
Min EPS beat(4)14.55%
Max EPS beat(4)123.42%
EPS beat(8)8
Avg EPS beat(8)37.7%
EPS beat(12)12
Avg EPS beat(12)45.64%
EPS beat(16)16
Avg EPS beat(16)52.81%
Revenue beat(2)1
Avg Revenue beat(2)-1.24%
Min Revenue beat(2)-2.85%
Max Revenue beat(2)0.37%
Revenue beat(4)3
Avg Revenue beat(4)0.41%
Min Revenue beat(4)-2.85%
Max Revenue beat(4)3.15%
Revenue beat(8)6
Avg Revenue beat(8)0.91%
Revenue beat(12)7
Avg Revenue beat(12)0.17%
Revenue beat(16)9
Avg Revenue beat(16)0.03%
PT rev (1m)-3.57%
PT rev (3m)-6.15%
EPS NQ rev (1m)1.5%
EPS NQ rev (3m)1.34%
EPS NY rev (1m)5.14%
EPS NY rev (3m)4.62%
Revenue NQ rev (1m)-2.54%
Revenue NQ rev (3m)-2.52%
Revenue NY rev (1m)-1.68%
Revenue NY rev (3m)-2.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.71 | ||
| Fwd PE | 10.53 | ||
| P/S | 0.59 | ||
| P/FCF | 10.87 | ||
| P/OCF | 5.92 | ||
| P/B | 2.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.52 |
EPS(TTM)11.9
EY9.33%
EPS(NY)12.11
Fwd EY9.5%
FCF(TTM)11.73
FCFY9.2%
OCF(TTM)21.52
OCFY16.88%
SpS217.25
BVpS43.85
TBVpS-83.23
PEG (NY)6.01
PEG (5Y)0.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.06% | ||
| ROE | 76.72% | ||
| ROCE | 13.06% | ||
| ROIC | 10.35% | ||
| ROICexc | 11.8% | ||
| ROICexgc | 26.78% | ||
| OM | 15.56% | ||
| PM (TTM) | 15.49% | ||
| GM | 82.35% | ||
| FCFM | 5.4% |
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-Score6
Asset Turnover0.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.14 | ||
| Debt/FCF | 11.8 | ||
| Debt/EBITDA | 3.24 | ||
| Cap/Depr | 113.81% | ||
| Cap/Sales | 4.51% | ||
| Interest Coverage | 3.78 | ||
| Cash Conversion | 50.74% | ||
| Profit Quality | 34.88% | ||
| Current Ratio | 1.78 | ||
| Quick Ratio | 1.7 | ||
| Altman-Z | 1.66 |
F-Score6
WACC8.14%
ROIC/WACC1.27
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)70.49%
EPS 3Y16.22%
EPS 5Y34.84%
EPS Q2Q%28.36%
EPS Next Y1.78%
EPS Next 2Y5.41%
EPS Next 3Y8.8%
EPS Next 5Y8.36%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y1.98%
Revenue growth 5Y2.26%
Sales Q2Q%-5.71%
Revenue Next Year0.63%
Revenue Next 2Y2.85%
Revenue Next 3Y3.73%
Revenue Next 5Y4.47%
EBIT growth 1Y15.02%
EBIT growth 3Y13.18%
EBIT growth 5Y13.88%
EBIT Next Year30.3%
EBIT Next 3Y16.27%
EBIT Next 5Y11.85%
FCF growth 1Y-31.24%
FCF growth 3Y7.04%
FCF growth 5Y14.67%
OCF growth 1Y-13.77%
OCF growth 3Y9.29%
OCF growth 5Y10.67%