It has been about a month since the last earnings report for HCA Holdings (HCA Quick QuoteHCA - Free Report) . Shares have added about 1.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is HCA due for a pullback? 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.

HCA Healthcare's Q4 Earnings Beat Estimates, Rise Y/Y

HCA Healthcare’s fourth-quarter 2020 adjusted earnings of $4.13 per share beat the Zacks Consensus Estimate by 13.8%. Further, the bottom line improved 33.7% year over year on the back of higher revenues.
The company witnessed solid inpatient volumes in the quarter.

Quarterly Details

HCA Healthcare’s revenues of $14.29 billion beat the Zacks Consensus Estimate by 2.5%. The top line also improved 5.7% from the year-ago period.

Same facility equivalent admissions declined 7.5% year over year while same facility admissions dipped 3.4% year over year. However, same facility revenue per equivalent admission grew 14.1% year over year on account of higher acuity of patients treated and a favorable payer mix witnessed in the quarter.

Same facility inpatient surgeries and same facility outpatient surgeries slid 6.7% and 5.1%, respectively, year over year.

Salaries and benefits, supplies and other operating expenses were up 3.5% year over year to $11.1 billion.

Adjusted EBITDA totaled $3.12 billion, up 13.9% year over year.

As of Dec 31, 2020, HCA Healthcare operated 185 hospitals.

Financial Update

Total assets came in at $47.5 billion as of Dec 31, 2020, up 5.4% from the 2019-end level.

Total debt of nearly $31 billion as of Dec 31, 2020 decreased 8.3% from the level at 2019 end.

In the reported quarter, capex came in at $748 million minus acquisitions.

Cash flows used in operating activities were $3.58 billion compared to cash flow provided by operating activities amounting to $2.5 billion in the year-ago period.

2021 Guidance

The company issued 2021 guidance following fourth-quarter 2020 results.

Management expects revenues for the current year in the band of $53.5-$55.5 billion.

Adjusted EBITDA    is estimated to be $10.3-$10.9 billion.

Capex of the company came in at $3.7 billion.

EPS for the company is projected at $12.10-$13.10 per share.

Share Repurchase and Dividend Update

The company’s board of directors recently resumed its share buyback policy, pertaining to which $2.8 billion was available for repurchase before its withdrawal. The board also authorized a plan for up to an additional $6 billion of its remaining outstanding stock.

HCA Healthcare also recommenced its quarterly dividend plan. It announced a quarterly cash dividend of 48 cents per share on its common stock. The dividend is payable Mar 31, 2021 to its shareholders of record on Mar 17, 2021. 

Full-Year Results

HCA Healthcare’s revenues for 2020 came in at $51.5 billion, up 0.4% year over year.

Net income attributable was $10.93 per share, increasing 8.5% year over year.

For 2020, adjusted EBITDA was $10 billion, up 1.8% year over year.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 9.62% due to these changes.

VGM Scores

At this time, HCA has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

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

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, HCA has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.