TENET HEALTHCARE CORP (THC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:THC - US88033G4073 - Common Stock
188.78 USD
-0.67 (-0.35%)
188.78 USD
0 (0%)
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. THC scores decently on growth, while it is valued quite cheap. This could make an interesting combination. This makes THC very considerable for value investing!
1. Profitability
1.1 Basic Checks
- In the past year THC was profitable.
- 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
- Looking at the Return On Assets, with a value of 4.60%, THC is in the better half of the industry, outperforming 73.79% of the companies in the same industry.
- The Return On Equity of THC (33.73%) is better than 94.17% of its industry peers.
- THC has a better Return On Invested Capital (11.65%) than 85.44% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for THC is in line with the industry average of 9.21%.
- The last Return On Invested Capital (11.65%) for THC is above the 3 year average (9.25%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.6% | ||
| ROE | 33.73% | ||
| ROIC | 11.65% |
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 (6.49%) is better than 84.47% of its industry peers.
- In the last couple of years the Profit Margin of THC has grown nicely.
- THC has a better Operating Margin (17.52%) than 96.12% of its industry peers.
- THC's Operating Margin has improved in the last couple of years.
- THC has a Gross Margin of 82.26%. This is amongst the best in the industry. THC outperforms 96.12% of its industry peers.
- 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 | 17.52% | ||
| PM (TTM) | 6.49% | ||
| GM | 82.26% |
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
- An Altman-Z score of 1.84 indicates that THC is not a great score, but indicates only limited risk for bankruptcy at the moment.
- THC has a Altman-Z score (1.84) which is in line with its industry peers.
- The Debt to FCF ratio of THC is 8.78, which is on the high side as it means it would take THC, 8.78 years of fcf income to pay off all of its debts.
- THC has a Debt to FCF ratio of 8.78. This is comparable to the rest of the industry: THC outperforms 50.49% of its industry peers.
- THC has a Debt/Equity ratio of 3.26. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 3.26, THC is doing worse than 74.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.26 | ||
| Debt/FCF | 8.78 | ||
| Altman-Z | 1.84 |
ROIC/WACC1.34
WACC8.7%
2.3 Liquidity
- A Current Ratio of 1.71 indicates that THC should not have too much problems paying its short term obligations.
- THC has a better Current ratio (1.71) than 67.96% of its industry peers.
- THC has a Quick Ratio of 1.64. 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 1.64, THC is in the better half of the industry, outperforming 66.02% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
- THC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 39.32%, which is quite impressive.
- THC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 34.84% yearly.
- THC shows a decrease in Revenue. In the last year, the revenue decreased by -0.56%.
- THC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.26% yearly.
EPS 1Y (TTM)39.32%
EPS 3Y16.22%
EPS 5Y34.84%
EPS Q2Q%26.28%
Revenue 1Y (TTM)-0.56%
Revenue growth 3Y1.98%
Revenue growth 5Y2.26%
Sales Q2Q%3.26%
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 13.65% yearly.
- The Revenue is expected to grow by 3.27% on average over the next years.
EPS Next Y36.74%
EPS Next 2Y17.92%
EPS Next 3Y15.45%
EPS Next 5Y13.65%
Revenue Next Year2.31%
Revenue Next 2Y3.3%
Revenue Next 3Y3.83%
Revenue Next 5Y3.27%
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
- The Price/Earnings ratio is 12.16, which indicates a correct valuation of THC.
- Based on the Price/Earnings ratio, THC is valued cheaply inside the industry as 84.47% of the companies are valued more expensively.
- THC's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
- The Price/Forward Earnings ratio is 11.41, which indicates a very decent valuation of THC.
- THC's Price/Forward Earnings ratio is rather cheap when compared to the industry. THC is cheaper than 87.38% of the companies in the same industry.
- THC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.16 | ||
| Fwd PE | 11.41 |
4.2 Price Multiples
- THC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. THC is cheaper than 90.29% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, THC is valued cheaper than 83.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.05 | ||
| EV/EBITDA | 5.99 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The excellent profitability rating of THC may justify a higher PE ratio.
- A more expensive valuation may be justified as THC's earnings are expected to grow with 15.45% in the coming years.
PEG (NY)0.33
PEG (5Y)0.35
EPS Next 2Y17.92%
EPS Next 3Y15.45%
5. Dividend
5.1 Amount
- No dividends for THC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
TENET HEALTHCARE CORP / THC FAQ
What is the ChartMill fundamental rating of TENET HEALTHCARE CORP (THC) stock?
ChartMill assigns a fundamental rating of 6 / 10 to THC.
What is the valuation status for THC stock?
ChartMill assigns a valuation rating of 9 / 10 to TENET HEALTHCARE CORP (THC). This can be considered as Undervalued.
Can you provide the profitability details for TENET HEALTHCARE CORP?
TENET HEALTHCARE CORP (THC) has a profitability rating of 9 / 10.
What is the valuation of TENET HEALTHCARE CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for TENET HEALTHCARE CORP (THC) is 12.16 and the Price/Book (PB) ratio is 4.13.
Can you provide the expected EPS growth for THC stock?
The Earnings per Share (EPS) of TENET HEALTHCARE CORP (THC) is expected to grow by 36.74% in the next year.