It has been about a month since the last earnings report for Community Health Systems (CYH Quick QuoteCYH - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Community Health Systems due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Community Health's Earnings Beat, Improve Y/Y in Q4

Community Health reported fourth-quarter 2021 adjusted net income of $1.15 per share, beating the Zacks Consensus Estimate by 130%. The bottom line increased 19.8% on a year-over-year basis.

CYH gained from higher revenues.

Net operating revenues of $3.2 billion increased 3.7% year over year in the quarter under review. The top line missed the consensus mark by 0.9%.

Quarterly Operational Update

In the fourth quarter, admissions and adjusted admissions dipped 7.3% and 2.1%, respectively, from the prior-year quarter’s respective figures. On a same-store basis, admissions fell 3.9% while adjusted admissions inched up 1.7% year over year.

As of Dec 31, 2021, number of licensed beds totaled 13,289, down 5.8% year over year.

Community Health’s adjusted EBITDA of $540 million was down 12.1% from the prior-year quarter’s figure.

Total operating costs and expenses of $2.8 billion rose 4.7% year over year due to other operating expenses.

In the quarter under review, interest expense, net fell 12.7% year over year to $220 million.

Financial Update

Community Health exited the fourth quarter with cash and cash equivalents of $507 million, which decreased from $1.67 billion.

As of Dec 31, 2021, total assets were $15.2 billion, down 4.9% from the 2020-end level.

As of Dec 31, 2021, Community Health’s long-term debt totaled $12.1 billion, which increased 0.1% from the 2020-end level.

For the year ended Dec 31, 2021, net cash used in operating activities of $131 million plunged from the year-ago comparable period’s net cash provided by operating activities of $2.1 billion.

Full-Year Update

For 2021, net revenues came in at $12.36 billion. This reflects an upside of 4.9% year over year. EPS for 2021 came in at $2.45 per share, comparing favorably with the year-ago quarters' 45 cents.

2022 Outlook

This year, Community Health’s net operating revenues are revised to the range of $12.6-$13.1 billion. The midpoint of the same indicates an upside of 3.9% from the year-ago quarter’s reading.

Adjusted EBITDA is estimated within $1.825-$1.975 billion.

Net income per share is anticipated to be $1-$1.50 per share.

Net cash provided by operating activities excluding the repayment of Medicare-accelerated payments is forecast between $950 million and $1100 million.

Capex is expected in the range of $500-$600 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -53.62% due to these changes.

VGM Scores

At this time, Community Health Systems has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Community Health Systems has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.