Common Well being Companies, Inc. UHS is scheduled to launch third-quarter 2024 outcomes on Oct. 24, after the closing bell. The Zacks Consensus Estimate for earnings per share is pegged at $3.75, which signifies a 47.1% surge from the prior-year quarter’s quantity. Its quarterly efficiency is anticipated to have been pushed by elevated admissions, greater adjusted affected person days and sustained demand for behavioral healthcare providers.
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Nevertheless, the third-quarter earnings estimate has witnessed downward revisions over the previous 60 days. In the meantime, the Zacks Consensus Estimate for third-quarter revenues is $3.9 billion, indicating 9.7% progress from the year-ago quarter’s determine.
Picture Supply: Zacks Funding Analysis
Earnings Shock Historical past of UHS
Common Well being’s backside line beat the consensus estimate in every of the trailing 4 quarters, with the common shock being 14.58%. That is depicted within the determine under:
Common Well being Companies, Inc. Worth and EPS Shock
Universal Health Services, Inc. price-eps-surprise | Common Well being Companies, Inc. Quote
What Our Quantitative Mannequin Unveils
Our confirmed mannequin doesn’t conclusively predict an earnings beat for Common Well being this time round. The mixture of a optimistic Earnings ESP and a Zacks Rank #1 (Sturdy Purchase), 2 (Purchase) or 3 (Maintain) will increase the percentages of an earnings beat. Nevertheless, that’s not the case right here, as you see under.
Earnings ESP: Common Well being has an Earnings ESP of -6.00%. It’s because the Most Correct Estimate is at the moment pegged at $3.53 per share, decrease than the Zacks Consensus Estimate of $3.75. You may uncover the most effective shares earlier than they’re reported with our Earnings ESP Filter.
Zacks Rank: UHS at the moment sports activities a Zacks Rank of 1. You may see the complete list of today’s Zacks #1 Rank stocks here.
Key Components More likely to Affect UHS’ Q3 Outcomes
Common Well being’s high line is prone to have been boosted by sturdy contributions from its Acute Care Hospital Companies and Behavioral Well being Care Companies segments. The Acute Care Hospital Companies unit is anticipated to have benefited from a rise in adjusted admissions and better web income per adjusted admission. For healthcare facility operators, increasing affected person volumes bode nicely since they contribute probably the most to general revenues.
The Zacks Consensus Estimate for web revenues on this phase is pegged at $2.2 billion, indicating 8.1% year-over-year progress. We estimate the metric to witness 9% year-over-year progress. Our estimate for the unit’s same-facility adjusted admissions signifies 4.6% progress from the prior-year quarter.
The Behavioral Well being Care Companies phase is prone to have been supported by sustained demand for psychological well being providers because the prevalence of psychological well being points amongst People continues. Moreover, the phase’s efficiency is anticipated to have been aided by progress in adjusted affected person days and income per adjusted affected person day.
The Zacks Consensus Estimate for web revenues on this phase is pegged at $1.7 billion, indicating an 11.1% enhance from the prior-year quarter. We estimate the metric to enhance 10.3% yr over yr. Our estimate for the unit’s adjusted affected person days signifies a year-over-year enhance of two.8%.
Nevertheless, Common Well being’s margins are prone to have confronted strain from rising general bills, notably as a result of greater salaries, wages and advantages, in addition to elevated prices for provides within the third quarter. We anticipate salaries, wages and advantages to extend 6.1% yr over yr, whereas provides bills are anticipated to escalate 7.5%.
UHS Inventory’s Worth Efficiency & Valuation
Common Well being’s shares have soared 89.4% prior to now yr in contrast with the industry’s 71.8% progress. It has additionally outperformed the broader Zacks Medical sector’s 15.7% rise and the S&P 500 Index’s 38.5% enhance within the stated timeframe. Compared with UHS, HCA Healthcare, Inc. HCA, one in all its friends, has gained 72.5% in the identical timeframe, whereas Acadia Healthcare Firm, Inc. ACHC has misplaced 30.7%.
One-Yr Worth Efficiency
Picture Supply: Zacks Funding Analysis
Now, let’s have a look at the worth Common Well being provides buyers at present ranges.
The corporate is cheaply priced in contrast with the business common. Presently, UHS is buying and selling at 13.81X ahead 12-months earnings, under the business’s common of 16.29X.
Picture Supply: Zacks Funding Analysis
Assessing Common Well being’s Prospects
The resumption of deferred elective procedures is anticipated to additional enhance affected person volumes and occupancy ranges for Common Well being. The corporate’s in depth therapy community, together with launching new providers, increasing present ones, recruiting expert physicians and making use of sturdy monetary and operational controls, improves the care providers rendered and will increase the profitability of hospitals. Its estimated earnings progress fee of 19% for the following 5 years compares favorably with the business common of 14.8%.
The corporate continues to reward shareholders with constant dividend funds and share repurchases, underpinned by sturdy money flows and operational resilience.
Conclusion
Whereas Common Well being faces challenges similar to an elevated working expense degree, the sturdy efficiency of its two segments makes it an interesting funding choice at current. UHS’ comparatively decrease valuation in contrast with the business additional enhances its attractiveness as a purchase.
The corporate has proven spectacular worth efficiency over the previous yr, reflecting buyers’ confidence. Regardless of the end result of its upcoming earnings report and the inventory’s subsequent motion, it stays a stable long-term funding choose as a result of its in depth therapy community and stable cash-generating skills.
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Universal Health Services, Inc. (UHS) : Free Stock Analysis Report
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