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Factors That Make Universal Health (UHS) an Attractive Bet Now
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Universal Health Services, Inc. (UHS - Free Report) is aided by improved patient volumes, an expanding healthcare portfolio and a commendable financial position. A favorable business outlook for 2023 reinforces investors’ confidence in the stock.
Top Zacks Rank & Upbeat Price Performance
Universal Health currently carries a Zacks Rank #2 (Buy).
The stock has soared 46.9% in a year, compared with the industry’s 56.7% growth. The Zacks Medical sector has declined 9.7% but the S&P 500 composite has risen 12.9% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
UHS carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. Back-tested results have shown that stocks with a favorable Value Score in combination with a solid Zacks Rank, are the best investment bets.
Robust Prospects
The Zacks Consensus Estimate for Universal Health’s 2023 earnings is pegged at $10.27 per share, indicating growth of 4% from the prior-year reported figure. The consensus mark for revenues stands at $14.1 billion, implying a rise of 5.4% from the year-ago reported number.
The consensus mark for 2024 earnings is pegged at $11.62 per share, suggesting an improvement of 13.1% from the 2023 estimate. The same for revenues stands at $14.7 billion, hinting at a 3.9% increase from the 2023 estimate.
Impressive Earnings Surprise History
Universal Health’s bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 5.62%.
Valuation: Cheaply Priced
Price-to-earnings (P/E) is one of the multiples used for valuing healthcare stocks. UHS has a reading of 13.86, compared with the hospital industry’s forward 12-month P/E ratio of 15.66. It is quite evident that the stock is currently undervalued.
A Strong View for 2023
UHS forecasts revenues to lie between $14,044 million and $14,314 million in 2023, the midpoint of which indicates roughly a 4.8-6.8% increase from the 2022 level.
Adjusted earnings per share are projected between $9.50 and $10.50 this year, the midpoint of which suggests 1.2% growth from the 2022 figure.
Key Drivers
The top line of Universal Health continues to benefit on the back of a growing patient base and solid contributions from the Acute Care Hospital Services and Behavioral Health Care Services segments. An official of UnitedHealth Group (UNH - Free Report) signaled toward the resumption of pent-up elective procedures at the Goldman Sachs Global Healthcare Conference held in June 2023.
This brings a ray of hope for healthcare facility operators like UHS whose revenues suffered due to a temporary pause exerted on elective surgeries in order to treat the escalating number of COVID cases.
An increase in the number of elective surgeries will bring about improved inpatient occupancy levels and boost revenues of Universal Health as its treatment network comprised 358 inpatient facilities across 39 states, Washington, D.C., the U.K. and Puerto Rico as of Mar 31, 2023.
Out of the total 358 inpatient facilities, 185 are behavioral healthcare facilities spread across the United States, thereby providing Universal Health with ample scope to capitalize on the solid demand for behavioral healthcare services resulting from the growing incidence of mental health issues among Americans.
UHS pursues service launches, upgradation of existing services and acquisitions of healthcare facilities to boost its capabilities, thereby paving the way for higher profitability of owned hospitals. It also resorts to such efforts as a means to delve into newer markets and solidify its presence across existing ones.
To pursue uninterrupted growth-related initiatives, a solid financial position is a dire need. The same is the case with Universal Health which contains solid cash reserves and adequate cash-generation abilities. Apart from business investments, a strong financial stand also enables UHS to engage in the prudent deployment of capital via share buybacks and dividend payments.
Alkermes’ earnings surpassed estimates in three of the last four quarters and matched the mark once, the average surprise being 90.83%. The Zacks Consensus Estimate for ALKS’s 2023 earnings is pegged at 79 cents per share and the figure has more than doubled from the prior year. The same for revenues suggests an improvement of 35.1% from the year-ago actual. The consensus mark for ALKS’s 2023 earnings has moved 21.5% north in the past 30 days.
The bottom line of Ligand Pharmaceuticals outpaced estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 21.50%. The Zacks Consensus Estimate for LGND’s 2023 earnings suggests 9.6% year-over-year growth. The consensus mark for LGND’s 2023 earnings has moved 9.6% north in the past 60 days.
Shares of Alkermes and Ligand Pharmaceuticals have declined 1.4% and 21.8%, respectively, in a year.
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Factors That Make Universal Health (UHS) an Attractive Bet Now
Universal Health Services, Inc. (UHS - Free Report) is aided by improved patient volumes, an expanding healthcare portfolio and a commendable financial position. A favorable business outlook for 2023 reinforces investors’ confidence in the stock.
Top Zacks Rank & Upbeat Price Performance
Universal Health currently carries a Zacks Rank #2 (Buy).
The stock has soared 46.9% in a year, compared with the industry’s 56.7% growth. The Zacks Medical sector has declined 9.7% but the S&P 500 composite has risen 12.9% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
UHS carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. Back-tested results have shown that stocks with a favorable Value Score in combination with a solid Zacks Rank, are the best investment bets.
Robust Prospects
The Zacks Consensus Estimate for Universal Health’s 2023 earnings is pegged at $10.27 per share, indicating growth of 4% from the prior-year reported figure. The consensus mark for revenues stands at $14.1 billion, implying a rise of 5.4% from the year-ago reported number.
The consensus mark for 2024 earnings is pegged at $11.62 per share, suggesting an improvement of 13.1% from the 2023 estimate. The same for revenues stands at $14.7 billion, hinting at a 3.9% increase from the 2023 estimate.
Impressive Earnings Surprise History
Universal Health’s bottom line outpaced estimates in each of the trailing four quarters, the average surprise being 5.62%.
Valuation: Cheaply Priced
Price-to-earnings (P/E) is one of the multiples used for valuing healthcare stocks. UHS has a reading of 13.86, compared with the hospital industry’s forward 12-month P/E ratio of 15.66. It is quite evident that the stock is currently undervalued.
A Strong View for 2023
UHS forecasts revenues to lie between $14,044 million and $14,314 million in 2023, the midpoint of which indicates roughly a 4.8-6.8% increase from the 2022 level.
Adjusted earnings per share are projected between $9.50 and $10.50 this year, the midpoint of which suggests 1.2% growth from the 2022 figure.
Key Drivers
The top line of Universal Health continues to benefit on the back of a growing patient base and solid contributions from the Acute Care Hospital Services and Behavioral Health Care Services segments. An official of UnitedHealth Group (UNH - Free Report) signaled toward the resumption of pent-up elective procedures at the Goldman Sachs Global Healthcare Conference held in June 2023.
This brings a ray of hope for healthcare facility operators like UHS whose revenues suffered due to a temporary pause exerted on elective surgeries in order to treat the escalating number of COVID cases.
An increase in the number of elective surgeries will bring about improved inpatient occupancy levels and boost revenues of Universal Health as its treatment network comprised 358 inpatient facilities across 39 states, Washington, D.C., the U.K. and Puerto Rico as of Mar 31, 2023.
Out of the total 358 inpatient facilities, 185 are behavioral healthcare facilities spread across the United States, thereby providing Universal Health with ample scope to capitalize on the solid demand for behavioral healthcare services resulting from the growing incidence of mental health issues among Americans.
UHS pursues service launches, upgradation of existing services and acquisitions of healthcare facilities to boost its capabilities, thereby paving the way for higher profitability of owned hospitals. It also resorts to such efforts as a means to delve into newer markets and solidify its presence across existing ones.
To pursue uninterrupted growth-related initiatives, a solid financial position is a dire need. The same is the case with Universal Health which contains solid cash reserves and adequate cash-generation abilities. Apart from business investments, a strong financial stand also enables UHS to engage in the prudent deployment of capital via share buybacks and dividend payments.
Other Stocks to Consider
Some other top-ranked stocks in the Medical space are Alkermes (ALKS - Free Report) and Ligand Pharmaceuticals (LGND - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alkermes’ earnings surpassed estimates in three of the last four quarters and matched the mark once, the average surprise being 90.83%. The Zacks Consensus Estimate for ALKS’s 2023 earnings is pegged at 79 cents per share and the figure has more than doubled from the prior year. The same for revenues suggests an improvement of 35.1% from the year-ago actual. The consensus mark for ALKS’s 2023 earnings has moved 21.5% north in the past 30 days.
The bottom line of Ligand Pharmaceuticals outpaced estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 21.50%. The Zacks Consensus Estimate for LGND’s 2023 earnings suggests 9.6% year-over-year growth. The consensus mark for LGND’s 2023 earnings has moved 9.6% north in the past 60 days.
Shares of Alkermes and Ligand Pharmaceuticals have declined 1.4% and 21.8%, respectively, in a year.