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HCA Healthcare, Inc.’s (HCA - Free Report) affiliate, HCA Houston Healthcare, recently concluded the acquisition of 11 freestanding emergency departments (EDs) previously owned by SignatureCare Emergency Centers. HCA has strategically rebranded the newly acquired centers as HCA Houston ER 24/7.
The deal helps HCA Houston Healthcare boost its freestanding EDs in the Houston region to 26, supplementing its existing hospital-based emergency rooms. The financial details of the deal are yet to be disclosed. The acquired facilities are located in Bellaire, Copperfield, Cypress, Atascocita, Memorial City, Montrose, Mission Bend, Stafford, Spring, Heights and Westchase.
This move aligns with HCA's overarching strategy to bolster its emergency services, solidifying its position as a dominant care provider. The recent acquisition is part of a broader, multi-year initiative aimed at boosting market share, targeting 29% of the healthcare services market by the end of the decade. It is currently at around 27%.
HCA's emphasis on investing in emergency care is anticipated to stimulate inpatient admissions and surgical procedures. This will expand its top line in the coming days. Also, the move will expand its footprint in Texas, which is one of its largest markets. Earlier this year, the company agreed to acquire 41 urgent care centers from FastMed in Texas.
In 2020, 2021 and 2022, HCA expended approximately $568 million, $1.1 billion and $224 million, respectively, on acquiring hospitals and healthcare entities. This strategic expansion underscores HCA Healthcare's dedication to the state, initiating a broader network reach. This will enable the company to reach its ambitious five-year growth targets.
Over the next five years, HCA expects robust annual growth in earnings per share, ranging between 8% and 12%. In operational metrics, the company envisions a 2-3% annual increase in equivalent admissions, matched by a corresponding rise in revenue per equivalent admission, which will be supported by its strategic acquisitions.
However, rising expenses continue to put a dent in its margins. It missed the third-quarter Zacks Consensus Estimate by 1.5% on an elevated expense level and the soft performance of the Valesco physician staffing joint venture. Also, its leveraged balance sheet with long-term debt, excluding debt issuance costs and discounts, amounted to $36.8 billion at the third-quarter end, while cash and cash equivalents were at $891 million. This might hamper its future acquisition plans.
Price Performance
Shares of HCA Healthcare have declined 6% in the past six months compared with the industry’s fall of 5.2%.
The Zacks Consensus Estimate for Enovis’ current-year earnings implies a 4.9% increase from the year-ago reported figure. The consensus mark for its current-year revenues is pegged at $1.7 billion. ENOV beat earnings estimates in all the last four quarters, with an average surprise of 11%.
The Zacks Consensus Estimate for Centene’s 2023 earnings indicates a 15.2% year-over-year increase to $6.66 per share. It has witnessed two upward estimate revisions over the past 30 days against no movement in the opposite direction. The consensus mark for CNC’s 2023 revenues calls for 4.4% growth from a year ago.
The Zacks Consensus Estimate for Motus GI’s 2023 bottom line suggests a 67.2% year-over-year improvement. MOTS has witnessed one upward estimate revision over the past 30 days against no movement in the opposite direction. It beat earnings estimates in all the last four quarters, with an average surprise of 40.2%.
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HCA Healthcare's (HCA) Houston Affiliate Acquires 11 EDs
HCA Healthcare, Inc.’s (HCA - Free Report) affiliate, HCA Houston Healthcare, recently concluded the acquisition of 11 freestanding emergency departments (EDs) previously owned by SignatureCare Emergency Centers. HCA has strategically rebranded the newly acquired centers as HCA Houston ER 24/7.
The deal helps HCA Houston Healthcare boost its freestanding EDs in the Houston region to 26, supplementing its existing hospital-based emergency rooms. The financial details of the deal are yet to be disclosed. The acquired facilities are located in Bellaire, Copperfield, Cypress, Atascocita, Memorial City, Montrose, Mission Bend, Stafford, Spring, Heights and Westchase.
This move aligns with HCA's overarching strategy to bolster its emergency services, solidifying its position as a dominant care provider. The recent acquisition is part of a broader, multi-year initiative aimed at boosting market share, targeting 29% of the healthcare services market by the end of the decade. It is currently at around 27%.
HCA's emphasis on investing in emergency care is anticipated to stimulate inpatient admissions and surgical procedures. This will expand its top line in the coming days. Also, the move will expand its footprint in Texas, which is one of its largest markets. Earlier this year, the company agreed to acquire 41 urgent care centers from FastMed in Texas.
In 2020, 2021 and 2022, HCA expended approximately $568 million, $1.1 billion and $224 million, respectively, on acquiring hospitals and healthcare entities. This strategic expansion underscores HCA Healthcare's dedication to the state, initiating a broader network reach. This will enable the company to reach its ambitious five-year growth targets.
Over the next five years, HCA expects robust annual growth in earnings per share, ranging between 8% and 12%. In operational metrics, the company envisions a 2-3% annual increase in equivalent admissions, matched by a corresponding rise in revenue per equivalent admission, which will be supported by its strategic acquisitions.
However, rising expenses continue to put a dent in its margins. It missed the third-quarter Zacks Consensus Estimate by 1.5% on an elevated expense level and the soft performance of the Valesco physician staffing joint venture. Also, its leveraged balance sheet with long-term debt, excluding debt issuance costs and discounts, amounted to $36.8 billion at the third-quarter end, while cash and cash equivalents were at $891 million. This might hamper its future acquisition plans.
Price Performance
Shares of HCA Healthcare have declined 6% in the past six months compared with the industry’s fall of 5.2%.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
The company currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Medical space are Enovis Corporation (ENOV - Free Report) , Centene Corporation (CNC - Free Report) and Motus GI Holdings, Inc. (MOTS - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Enovis’ current-year earnings implies a 4.9% increase from the year-ago reported figure. The consensus mark for its current-year revenues is pegged at $1.7 billion. ENOV beat earnings estimates in all the last four quarters, with an average surprise of 11%.
The Zacks Consensus Estimate for Centene’s 2023 earnings indicates a 15.2% year-over-year increase to $6.66 per share. It has witnessed two upward estimate revisions over the past 30 days against no movement in the opposite direction. The consensus mark for CNC’s 2023 revenues calls for 4.4% growth from a year ago.
The Zacks Consensus Estimate for Motus GI’s 2023 bottom line suggests a 67.2% year-over-year improvement. MOTS has witnessed one upward estimate revision over the past 30 days against no movement in the opposite direction. It beat earnings estimates in all the last four quarters, with an average surprise of 40.2%.