TENET HEALTHCARE CORP (THC) Stock Fundamental Analysis
NYSE:THC - New York Stock Exchange, Inc. - US88033G4073 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to THC. THC was compared to 103 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. 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.
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 better Return On Assets (4.98%) than 78.64% of its industry peers.
Looking at the Return On Equity, with a value of 34.80%, THC belongs to the top of the industry, outperforming 97.09% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 10.80%, THC belongs to the top of the industry, outperforming 84.47% of the companies in the same industry.
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 9.71%.
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
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 has a better Operating Margin (16.46%) than 91.26% of its industry peers.
In the last couple of years the Operating Margin of THC has grown nicely.
The Gross Margin of THC (82.33%) is better than 95.15% 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 | 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.
THC has less shares outstanding than it did 1 year ago.
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 1.77, we must say that THC is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of THC (1.77) is worse than 61.16% of 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.
THC has a Debt/Equity ratio of 3.13. This is a high value indicating a heavy dependency on external financing.
THC has a Debt to Equity ratio of 3.13. This is in the lower half of the industry: THC underperforms 78.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.13 | ||
| Debt/FCF | 9.33 | ||
| Altman-Z | 1.77 |
ROIC/WACC1.31
WACC8.25%
2.3 Liquidity
A Current Ratio of 1.78 indicates that THC should not have too much problems paying its short term obligations.
The Current ratio of THC (1.78) is better than 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.
Looking at the Quick ratio, with a value of 1.70, THC is in the better half of the industry, outperforming 63.11% 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 48.52%, 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 decrease in Revenue. The Revenue has decreased by -1.79% in the last year.
The Revenue has been growing slightly by 2.26% on average over the past years.
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.
The Revenue is expected to grow by 3.03% on average over the next years.
EPS Next Y8.8%
EPS Next 2Y8.03%
EPS Next 3Y9.7%
EPS Next 5Y13.82%
Revenue Next Year0.61%
Revenue Next 2Y2.8%
Revenue Next 3Y3.63%
Revenue Next 5Y3.03%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
Based on the Price/Earnings ratio of 13.15, the valuation of THC can be described as correct.
Based on the Price/Earnings ratio, THC is valued cheaply inside the industry as 82.52% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.45, THC is valued rather cheaply.
With a Price/Forward Earnings ratio of 12.35, THC is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of THC indicates a rather cheap valuation: THC is cheaper than 82.52% of the companies listed in the same industry.
THC is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.15 | ||
| Fwd PE | 12.35 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, THC is valued cheaper than 89.32% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, THC is valued cheaply inside the industry as 83.50% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.28 | ||
| EV/EBITDA | 6.23 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
THC has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.5
PEG (5Y)0.38
EPS Next 2Y8.03%
EPS Next 3Y9.7%
5. Dividend
5.1 Amount
No dividends for THC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
171.5
-0.72 (-0.42%)
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 Change2.46%
Market Cap15.93B
Analysts81.43
Price Target189.73 (10.63%)
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)7.06%
PT rev (3m)7.04%
EPS NQ rev (1m)-0.15%
EPS NQ rev (3m)8.17%
EPS NY rev (1m)1.47%
EPS NY rev (3m)5.26%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)0.23%
Revenue NY rev (1m)0.06%
Revenue NY rev (3m)-0.02%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.15 | ||
| Fwd PE | 12.35 | ||
| P/S | 0.78 | ||
| P/FCF | 11.28 | ||
| P/OCF | 7 | ||
| P/B | 3.81 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.23 |
EPS(TTM)13.04
EY7.6%
EPS(NY)13.89
Fwd EY8.1%
FCF(TTM)15.2
FCFY8.86%
OCF(TTM)24.5
OCFY14.29%
SpS220.91
BVpS45.01
TBVpS-86.18
PEG (NY)1.5
PEG (5Y)0.38
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 | 1.77 |
F-Score5
WACC8.25%
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 2Y8.03%
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 2Y2.8%
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%