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 106 industry peers in the Health Care Providers & Services industry. While THC has a great profitability rating, there are some minor concerns on its financial health. THC may be a bit undervalued, certainly considering the very reasonable score on growth
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.
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
With an excellent Return On Assets value of 11.06%, THC belongs to the best of the industry, outperforming 95.28% of the companies in the same industry.
THC's Return On Equity of 76.72% is amongst the best of the industry. THC outperforms 97.17% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.35%, THC belongs to the top of the industry, outperforming 84.91% 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 8.79%.
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
THC's Profit Margin of 15.49% is amongst the best of the industry. THC outperforms 98.11% of its industry peers.
THC's Profit Margin has improved in the last couple of years.
The Operating Margin of THC (15.56%) is better than 91.51% of its industry peers.
In the last couple of years the Operating Margin of THC has grown nicely.
THC has a better Gross Margin (82.35%) than 95.28% 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 | 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
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
The debt/assets ratio for THC has been reduced compared to a year ago.
2.2 Solvency
THC has an Altman-Z score of 1.64. This is a bad value and indicates that THC is not financially healthy and even has some risk of bankruptcy.
THC's Altman-Z score of 1.64 is in line compared to the rest of the industry. THC outperforms 41.51% of its industry peers.
THC has a debt to FCF ratio of 11.80. This is a negative value and a sign of low solvency as THC would need 11.80 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 11.80, THC is in line with its industry, outperforming 50.94% of the companies in the same industry.
THC has a Debt/Equity ratio of 3.14. This is a high value indicating a heavy dependency on external 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 79.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.14 | ||
| Debt/FCF | 11.8 | ||
| Altman-Z | 1.64 |
ROIC/WACC1.28
WACC8.11%
2.3 Liquidity
A Current Ratio of 1.78 indicates that THC should not have too much problems paying its short term obligations.
THC's Current ratio of 1.78 is fine compared to the rest of the industry. THC outperforms 64.15% 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.
THC has a better Quick ratio (1.70) than 65.09% of its industry peers.
| 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
The Revenue has been growing slightly by 0.57% in the past 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)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
THC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.17% yearly.
The Revenue is expected to grow by 3.12% on average over the next years.
EPS Next Y3.2%
EPS Next 2Y5.89%
EPS Next 3Y8.5%
EPS Next 5Y14.17%
Revenue Next Year0.48%
Revenue Next 2Y2.75%
Revenue Next 3Y3.53%
Revenue Next 5Y3.12%
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 10.24, which indicates a very decent valuation of THC.
Based on the Price/Earnings ratio, THC is valued cheaper than 87.74% of the companies in the same industry.
When comparing the Price/Earnings ratio of THC to the average of the S&P500 Index (28.29), we can say THC is valued rather cheaply.
The Price/Forward Earnings ratio is 9.92, which indicates a very decent valuation of THC.
Based on the Price/Forward Earnings ratio, THC is valued cheaply inside the industry as 90.57% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.08. THC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.24 | ||
| Fwd PE | 9.92 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, THC is valued cheaper than 91.51% of the companies in the same industry.
84.91% 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 | 10.3 | ||
| EV/EBITDA | 5.37 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of THC may justify a higher PE ratio.
PEG (NY)3.2
PEG (5Y)0.29
EPS Next 2Y5.89%
EPS Next 3Y8.5%
5. Dividend
5.1 Amount
No dividends for THC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
121.81
+1.37 (+1.14%)
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 Change0.36%
Ins Owners0.81%
Ins Owner Change3.37%
Market Cap11.50B
Analysts80
Price Target175.31 (43.92%)
Short Float %3.71%
Short Ratio2.42
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)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)-1.09%
PT rev (3m)-5.8%
EPS NQ rev (1m)-0.7%
EPS NQ rev (3m)0.62%
EPS NY rev (1m)1.39%
EPS NY rev (3m)6.6%
Revenue NQ rev (1m)-0.1%
Revenue NQ rev (3m)-2.62%
Revenue NY rev (1m)-0.15%
Revenue NY rev (3m)-2.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.24 | ||
| Fwd PE | 9.92 | ||
| P/S | 0.56 | ||
| P/FCF | 10.3 | ||
| P/OCF | 5.62 | ||
| P/B | 2.76 | ||
| P/tB | N/A | ||
| EV/EBITDA | 5.37 |
EPS(TTM)11.9
EY9.77%
EPS(NY)12.28
Fwd EY10.08%
FCF(TTM)11.83
FCFY9.71%
OCF(TTM)21.69
OCFY17.81%
SpS218.98
BVpS44.2
TBVpS-83.89
PEG (NY)3.2
PEG (5Y)0.29
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 | 1.64 |
F-Score6
WACC8.11%
ROIC/WACC1.28
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 Y3.2%
EPS Next 2Y5.89%
EPS Next 3Y8.5%
EPS Next 5Y14.17%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y1.98%
Revenue growth 5Y2.26%
Sales Q2Q%-5.71%
Revenue Next Year0.48%
Revenue Next 2Y2.75%
Revenue Next 3Y3.53%
Revenue Next 5Y3.12%
EBIT growth 1Y15.02%
EBIT growth 3Y13.18%
EBIT growth 5Y13.88%
EBIT Next Year30.36%
EBIT Next 3Y13.53%
EBIT Next 5Y9.75%
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%