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Why Is Community Health Systems (CYH) Down 36.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Community Health Systems (CYH - Free Report) . Shares have lost about 36.9% 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 Q1 Earnings Beat, Trims ’22 EPS View
Community Health reported first-quarter 2022 adjusted net income of 14 cents share, which outpaced the Zacks Consensus Estimate by 7.7% but declined 61.1% year over year.
Concurrent with first-quarter results, management trimmed its 2022 guidance for net income per share. The metric is expected between 75 cents and $1.30 per share, lower than the prior guidance of $1-$1.50 per share. The mid-point of the revised guidance indicates 58.2% plunge from the 2021 figure.
Nevertheless, the quarterly results of CYH were aided by higher revenues and improved revenues and uptick in adjusted admissions. However, increasing incidence of COVID patients had adversely impacted the net operating revenues, labor expense and length of stay in the quarter under review.
Quarterly Operational Update
Net operating revenues amounted to $3.1 billion, which rose 3.3% year over year in the first quarter, driven by higher adjusted admissions. Yet, the top line missed the consensus mark by 1.6%.
Admissions slipped 1.7% year over year, while adjusted admissions grew 2.2% year over year in the quarter under review. On a same-store basis, admissions dipped 0.3% year over year but adjusted admissions improved 3.2% from the prior-year quarter’s reported figure.
Community Health had licensed beds of 13, 289 as of Mar 31, 2022, which declined 2% year over year.
Adjusted EBITDA decreased 17.4% year over year to $409 million in the first quarter.
Total operating costs and expenses were $2.8 billion, which escalated 5.7% year over year primarily due to other operating expenses. Meanwhile, CYH’s interest expense, net, decreased 6.1% year over year to $217 million.
Financial Update (as of Mar 31, 2022)
Community Health exited the first quarter with cash and cash equivalents of $460 million, down 9.3% from 2021-end figure. Total assets inched up 0.3% from 2021-end to $15.3 billion.
Long-term debt amounted to $12.2 billion, which inched up 0.4% from the level at 2021 end.
Net cash provided by operating activities remained unchanged year over year level at $101 million in the first quarter.
2022 Outlook in Details
Adjusted EBITDA is projected within $1.775-$1.925 billion compared with the previous outlook of $1.825-$1.975 billion. The mid-point of the revised outlook suggests 6% decline from the 2021 figure.
Net cash provided by operating activities is anticipated to lie between $900 million and $1.05 billion for 2022, lower than the prior outlook of $950 million and $1.1 million.
Meanwhile, the guidance for net operating revenues in the range of $12.6-$13.1 billion remains unchanged.
Capex is continued to be estimated within $500-$600 million. Labor costs are expected to remain high in the remaining part of the year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -40% 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. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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.
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Why Is Community Health Systems (CYH) Down 36.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Community Health Systems (CYH - Free Report) . Shares have lost about 36.9% 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 Q1 Earnings Beat, Trims ’22 EPS View
Community Health reported first-quarter 2022 adjusted net income of 14 cents share, which outpaced the Zacks Consensus Estimate by 7.7% but declined 61.1% year over year.
Concurrent with first-quarter results, management trimmed its 2022 guidance for net income per share. The metric is expected between 75 cents and $1.30 per share, lower than the prior guidance of $1-$1.50 per share. The mid-point of the revised guidance indicates 58.2% plunge from the 2021 figure.
Nevertheless, the quarterly results of CYH were aided by higher revenues and improved revenues and uptick in adjusted admissions. However, increasing incidence of COVID patients had adversely impacted the net operating revenues, labor expense and length of stay in the quarter under review.
Quarterly Operational Update
Net operating revenues amounted to $3.1 billion, which rose 3.3% year over year in the first quarter, driven by higher adjusted admissions. Yet, the top line missed the consensus mark by 1.6%.
Admissions slipped 1.7% year over year, while adjusted admissions grew 2.2% year over year in the quarter under review. On a same-store basis, admissions dipped 0.3% year over year but adjusted admissions improved 3.2% from the prior-year quarter’s reported figure.
Community Health had licensed beds of 13, 289 as of Mar 31, 2022, which declined 2% year over year.
Adjusted EBITDA decreased 17.4% year over year to $409 million in the first quarter.
Total operating costs and expenses were $2.8 billion, which escalated 5.7% year over year primarily due to other operating expenses. Meanwhile, CYH’s interest expense, net, decreased 6.1% year over year to $217 million.
Financial Update (as of Mar 31, 2022)
Community Health exited the first quarter with cash and cash equivalents of $460 million, down 9.3% from 2021-end figure. Total assets inched up 0.3% from 2021-end to $15.3 billion.
Long-term debt amounted to $12.2 billion, which inched up 0.4% from the level at 2021 end.
Net cash provided by operating activities remained unchanged year over year level at $101 million in the first quarter.
2022 Outlook in Details
Adjusted EBITDA is projected within $1.775-$1.925 billion compared with the previous outlook of $1.825-$1.975 billion. The mid-point of the revised outlook suggests 6% decline from the 2021 figure.
Net cash provided by operating activities is anticipated to lie between $900 million and $1.05 billion for 2022, lower than the prior outlook of $950 million and $1.1 million.
Meanwhile, the guidance for net operating revenues in the range of $12.6-$13.1 billion remains unchanged.
Capex is continued to be estimated within $500-$600 million. Labor costs are expected to remain high in the remaining part of the year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -40% 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. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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.