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HCA Healthcare (HCA) Up 43.1% in a Year: Is More Upside Left?
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Shares of HCA Healthcare, Inc. (HCA - Free Report) have rallied 43.1% in the past year, outperforming the industry’s increase of 27.6%. The stock upsurge came against the Medical sector’s decline of 20.1%. The S&P 500 composite index has risen 6.2% in the said time frame.
Image Source: Zacks Investment Research
With a market capitalization of $81.06 billion, the average volume of shares traded in the last three months was 1.5 million. The hospital company has been gaining momentum from its growth initiatives, solid volumes and cost-cutting measures for a while now.
This diversified healthcare services player, currently carrying a Zacks Rank #3 (Hold), has a solid surprise record with its earnings beating estimates in three of its trailing four estimates, the average surprise being 17.51%.
Can HCA Retain the Momentum?
HCA Healthcare boasts a strong inorganic growth profile. The healthcare provider’s numerous acquisitions, rising admissions, diversified business and capital deployment should drive long-term growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2022 earnings has moved 0.1% north, while that for 2023 has moved 0.2% up in the past 30 days, indicating analysts’ optimism.
HCA’s trailing 12-month return on equity (ROE) of 303.4% remains above the industry’s ROE of 149.95%. This highlights the tactical efficiency in utilizing its shareholder’s funds.
HCA Healthcare has been witnessing solid patient volumes for many quarters now owing to rising admissions.
HCA's revenues are bouncing back owing to admissions, outpatient surgeries and other procedures. In 2021, its revenues were up 14% year over year. Total equivalent admissions in the same time frame increased 6.8% while revenues per equivalent admission rose 6.8% year over year.
Volumes across all businesses grew last year, leading to solid top-line growth. HCA Healthcare has also been gaining traction from its telehealth services for a while. Given the current situation, people will likely continue availing virtual medical visits, which will drive this business line.
Coming to inorganic growth, HCA keeps emphasizing on acquisitions for expedited growth.
HCA Healthcare closed the Brookdale Home Health and Hospice transaction. In the second quarter of 2021, it closed the Meadows Regional Hospital buyout in Vidalia, GA.
The leading hospital organization’s solvency level is also impressive, showing potential for accretive mergers and acquisitions alongside shareholder-friendly capital deployment through buybacks. Its cash flow provided by operating activities continues to be strong with the metric rising 12.4% and 21.4% year over year in 2019 and 2020, respectively. For 2021, cash flow from operations was a tad below $9 billion. Its board of directors authorized a new $8-billion share repurchase plan and even hiked its quarterly dividend 16.7% to 56 cents per share.
Time and again, the hospital player made efforts to bolster its portfolio.
At the end of 2021, HCA operated 182 hospitals and approximately 2,200 ambulatory sites of care, including surgery centers, freestanding emergency rooms, urgent care centers and physician clinics in 20 states and the United Kingdom.
We believe that HCA Healthcare is well-poised for growth on the back of its various initiatives.
Following stellar fourth-quarter results, HCA provided the current-year outlook. Management expects current-year revenues in the band of $60-$62 billion, the midpoint being 3.8% higher than the 2021 figure. Net income is expected between $5.55 billion and $5.835 billion. Outpatient revenues are estimated to grow in the mid-to-high-single digits.
For 2022, HCA Healthcare’s EPS is expected to be $18.40-19.20.
Stocks to Consider
Some better-ranked stocks in the medical space are Mednax, Inc. (MD - Free Report) , The Ensign Group, Inc. (ENSG - Free Report) and AmerisourceBergen Corporation .
While Mednax sports a Zacks Rank #1 (Strong Buy), Ensign Group and AmerisourceBergen carry a Zacks Rank #2 (Buy) at present.
Mednax’s earnings surpassed estimates in each of the last four quarters, the average being 27.99%. The Zacks Consensus Estimate for MD’s 2022 earnings suggests an improvement of 12.9% from the year-ago reported figure, while the same for revenues suggests growth of 4.2%. The consensus mark for MD’s 2022 earnings has moved 7% north in the past 30 days.
The bottom line of Ensign Group outpaced earnings estimates in each of the last four quarters, the average being 1.72%. The Zacks Consensus Estimate for ENSG’s 2022 earnings suggests an improvement of 11.8% from the year-ago reported figure, while the same for revenues suggests growth of 12.1%. The consensus mark for 2022 earnings has moved 3% north in the past 30 days. ENSG has a VGM Score of A.
AmerisourceBergen delivered a trailing four-quarter earnings surprise of 2.29%, on average. The Zacks Consensus Estimate for ABC’s 2022 earnings indicates a rise of 16.5% from the year-ago reported figure. The consensus mark has been revised1% upward in the past 60 days. ABC has a VGM Score of A.
Shares of Mednax and Ensign Group have lost 14%, and 3.5, respectively, in a year while the stock of AmerisourceBergen has gained 29.5%.
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HCA Healthcare (HCA) Up 43.1% in a Year: Is More Upside Left?
Shares of HCA Healthcare, Inc. (HCA - Free Report) have rallied 43.1% in the past year, outperforming the industry’s increase of 27.6%. The stock upsurge came against the Medical sector’s decline of 20.1%. The S&P 500 composite index has risen 6.2% in the said time frame.
Image Source: Zacks Investment Research
With a market capitalization of $81.06 billion, the average volume of shares traded in the last three months was 1.5 million. The hospital company has been gaining momentum from its growth initiatives, solid volumes and cost-cutting measures for a while now.
This diversified healthcare services player, currently carrying a Zacks Rank #3 (Hold), has a solid surprise record with its earnings beating estimates in three of its trailing four estimates, the average surprise being 17.51%.
Can HCA Retain the Momentum?
HCA Healthcare boasts a strong inorganic growth profile. The healthcare provider’s numerous acquisitions, rising admissions, diversified business and capital deployment should drive long-term growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2022 earnings has moved 0.1% north, while that for 2023 has moved 0.2% up in the past 30 days, indicating analysts’ optimism.
HCA’s trailing 12-month return on equity (ROE) of 303.4% remains above the industry’s ROE of 149.95%. This highlights the tactical efficiency in utilizing its shareholder’s funds.
HCA Healthcare has been witnessing solid patient volumes for many quarters now owing to rising admissions.
HCA's revenues are bouncing back owing to admissions, outpatient surgeries and other procedures. In 2021, its revenues were up 14% year over year. Total equivalent admissions in the same time frame increased 6.8% while revenues per equivalent admission rose 6.8% year over year.
Volumes across all businesses grew last year, leading to solid top-line growth. HCA Healthcare has also been gaining traction from its telehealth services for a while. Given the current situation, people will likely continue availing virtual medical visits, which will drive this business line.
Coming to inorganic growth, HCA keeps emphasizing on acquisitions for expedited growth.
HCA Healthcare closed the Brookdale Home Health and Hospice transaction. In the second quarter of 2021, it closed the Meadows Regional Hospital buyout in Vidalia, GA.
The leading hospital organization’s solvency level is also impressive, showing potential for accretive mergers and acquisitions alongside shareholder-friendly capital deployment through buybacks. Its cash flow provided by operating activities continues to be strong with the metric rising 12.4% and 21.4% year over year in 2019 and 2020, respectively. For 2021, cash flow from operations was a tad below $9 billion. Its board of directors authorized a new $8-billion share repurchase plan and even hiked its quarterly dividend 16.7% to 56 cents per share.
Time and again, the hospital player made efforts to bolster its portfolio.
At the end of 2021, HCA operated 182 hospitals and approximately 2,200 ambulatory sites of care, including surgery centers, freestanding emergency rooms, urgent care centers and physician clinics in 20 states and the United Kingdom.
We believe that HCA Healthcare is well-poised for growth on the back of its various initiatives.
Following stellar fourth-quarter results, HCA provided the current-year outlook. Management expects current-year revenues in the band of $60-$62 billion, the midpoint being 3.8% higher than the 2021 figure. Net income is expected between $5.55 billion and $5.835 billion. Outpatient revenues are estimated to grow in the mid-to-high-single digits.
For 2022, HCA Healthcare’s EPS is expected to be $18.40-19.20.
Stocks to Consider
Some better-ranked stocks in the medical space are Mednax, Inc. (MD - Free Report) , The Ensign Group, Inc. (ENSG - Free Report) and AmerisourceBergen Corporation .
While Mednax sports a Zacks Rank #1 (Strong Buy), Ensign Group and AmerisourceBergen carry a Zacks Rank #2 (Buy) at present.
Mednax’s earnings surpassed estimates in each of the last four quarters, the average being 27.99%. The Zacks Consensus Estimate for MD’s 2022 earnings suggests an improvement of 12.9% from the year-ago reported figure, while the same for revenues suggests growth of 4.2%. The consensus mark for MD’s 2022 earnings has moved 7% north in the past 30 days.
The bottom line of Ensign Group outpaced earnings estimates in each of the last four quarters, the average being 1.72%. The Zacks Consensus Estimate for ENSG’s 2022 earnings suggests an improvement of 11.8% from the year-ago reported figure, while the same for revenues suggests growth of 12.1%. The consensus mark for 2022 earnings has moved 3% north in the past 30 days. ENSG has a VGM Score of A.
AmerisourceBergen delivered a trailing four-quarter earnings surprise of 2.29%, on average. The Zacks Consensus Estimate for ABC’s 2022 earnings indicates a rise of 16.5% from the year-ago reported figure. The consensus mark has been revised1% upward in the past 60 days. ABC has a VGM Score of A.
Shares of Mednax and Ensign Group have lost 14%, and 3.5, respectively, in a year while the stock of AmerisourceBergen has gained 29.5%.