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HCA Healthcare (HCA) Rises 24.8% in a Year: More Room to Run?
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HCA Healthcare, Inc. (HCA - Free Report) shares have jumped 24.8% in the past year, in line with the industryit belongs to, thanks to its expanding patient volumes and increasing surgeries. Its long-term growth potential is intriguing at the moment. In the past year, the company’s shares outperformed the 7.6% growth in the Medical sector.
Based in Nashville, TN, HCA Healthcare is one of the leading operators of acute care hospitals in the United States. It also operates outpatient healthcare facilities and has a market cap of $82.5 billion. Its ability to engage in inorganic growth initiatives and impressive business outlook are major positives. These factors collectively contributed to this Zacks Rank #1 (Strong Buy) company's notable price appreciation. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCAcurrently carries a VGM Score of A. Our research shows that stocks with a Zacks Rank #1 or 2 (Buy), when combined with a VGM Score of A or B, offer the best investment opportunities.
Image Source: Zacks Investment Research
Can it Retain Momentum?
The ingredients are there, and now let’s get into the details and show you how its estimates for the coming days stand.
The Zacks Consensus Estimate for HCA Healthcare’s 2024 full-year earnings is pegged at $20.49 per share, indicating a 7.8% rise from $19.01 a year ago. The company beat earnings estimates in three of the last four quarters and missed once, with an average surprise of 9.8%.
The consensus mark for full-year 2024 revenues stands at nearly $69 billion, suggesting a 6.2% rise from the prior-year reported number. Our model indicates significant increases in equivalent admissions and revenue per unit, which are likely to support the top-line growth.
We expect 2024 equivalent admissions to rise more than 2% year over year. Our model predicts growth in revenue per equivalent admissions to exceed 3% from the year-ago level. We expect patient days to increase nearly 3% this year, along with growing inpatient and outpatient surgery cases. The strong operations will likely continue boosting HCA’s performance.
We expect revenues from National Group and Atlantic Group to witness almost 9% and 7% growth in 2024, respectively. The same in American Group is expected to continue on its growth path, contributing 34.5% of the company’s total revenues. Growth in Managed Medicare operations will keep driving its performance.
The company anticipates 2024 adjusted EBITDA between $12.9 billion and $13.6 billion, the midpoint predicting 6.2% growth from the 2023 figure. Its focus on acquisitions will keep adding scale to its business. As such, we expect the weighted average beds in service to rise close to 2% in 2024.
The company's shareholder-friendly initiatives are impressive. In 2022 and 2023, it repurchased shares totaling $7 billion and $3.8 billion, respectively. Additionally, it authorized an additional increase of up to $6 billion in its share repurchase program. Furthermore, in January 2024, it raised its quarterly dividend by 10% to 66 cents per share.
Risks
Despite the upside potential, there are a few factors that investors should keep an eye on.
Its long-term debt to capital of 97.2% is pretty high and above the industry average of 89.3%. HCA Healthcare exited the fourth quarter with cash and cash equivalents of $935 million and long-term debt, excluding debt issuance costs and discounts, of $37.2 billion. Also, escalating salaries and benefits expenses are eating into its profits. We expect it to jump more than 5% in 2024. Nevertheless, we believe that a systematic and strategic plan of action will drive the company’s long-term growth.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Universal Health Services, Inc. (UHS - Free Report) , The Cigna Group (CI - Free Report) and Health Catalyst, Inc. (HCAT - Free Report) , each carrying a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Universal Health Services’ 2024 bottom line suggests a 19.9% year-over-year improvement. UHS has witnessed three upward estimate revisions over the past 30 days against one movement in the opposite direction. It beat earnings estimates in all the last four quarters, with an average surprise of 5.9%.
The Zacks Consensus Estimate for Cigna’s full-year 2024 earnings indicates a 13% year-over-year increase. CI beat earnings estimates in each of the past four quarters, with an average surprise of 2.9%. The consensus mark for revenues predicts a 20.4% growth from the year-ago period.
The Zacks Consensus Estimate for Health Catalyst’s 2024 full-year earnings implies a 93.3% increase from the year-ago reported figure. The consensus mark for its current-year revenues is pegged at $308 million, indicating a 4.1% year-over-year increase. HCAT beat earnings estimates in each of the last four quarters, with an average surprise of 247.9%.
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HCA Healthcare (HCA) Rises 24.8% in a Year: More Room to Run?
HCA Healthcare, Inc. (HCA - Free Report) shares have jumped 24.8% in the past year, in line with the industry it belongs to, thanks to its expanding patient volumes and increasing surgeries. Its long-term growth potential is intriguing at the moment. In the past year, the company’s shares outperformed the 7.6% growth in the Medical sector.
Based in Nashville, TN, HCA Healthcare is one of the leading operators of acute care hospitals in the United States. It also operates outpatient healthcare facilities and has a market cap of $82.5 billion. Its ability to engage in inorganic growth initiatives and impressive business outlook are major positives. These factors collectively contributed to this Zacks Rank #1 (Strong Buy) company's notable price appreciation. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCAcurrently carries a VGM Score of A. Our research shows that stocks with a Zacks Rank #1 or 2 (Buy), when combined with a VGM Score of A or B, offer the best investment opportunities.
Image Source: Zacks Investment Research
Can it Retain Momentum?
The ingredients are there, and now let’s get into the details and show you how its estimates for the coming days stand.
The Zacks Consensus Estimate for HCA Healthcare’s 2024 full-year earnings is pegged at $20.49 per share, indicating a 7.8% rise from $19.01 a year ago. The company beat earnings estimates in three of the last four quarters and missed once, with an average surprise of 9.8%.
The consensus mark for full-year 2024 revenues stands at nearly $69 billion, suggesting a 6.2% rise from the prior-year reported number. Our model indicates significant increases in equivalent admissions and revenue per unit, which are likely to support the top-line growth.
We expect 2024 equivalent admissions to rise more than 2% year over year. Our model predicts growth in revenue per equivalent admissions to exceed 3% from the year-ago level. We expect patient days to increase nearly 3% this year, along with growing inpatient and outpatient surgery cases. The strong operations will likely continue boosting HCA’s performance.
We expect revenues from National Group and Atlantic Group to witness almost 9% and 7% growth in 2024, respectively. The same in American Group is expected to continue on its growth path, contributing 34.5% of the company’s total revenues. Growth in Managed Medicare operations will keep driving its performance.
The company anticipates 2024 adjusted EBITDA between $12.9 billion and $13.6 billion, the midpoint predicting 6.2% growth from the 2023 figure. Its focus on acquisitions will keep adding scale to its business. As such, we expect the weighted average beds in service to rise close to 2% in 2024.
The company's shareholder-friendly initiatives are impressive. In 2022 and 2023, it repurchased shares totaling $7 billion and $3.8 billion, respectively. Additionally, it authorized an additional increase of up to $6 billion in its share repurchase program. Furthermore, in January 2024, it raised its quarterly dividend by 10% to 66 cents per share.
Risks
Despite the upside potential, there are a few factors that investors should keep an eye on.
Its long-term debt to capital of 97.2% is pretty high and above the industry average of 89.3%. HCA Healthcare exited the fourth quarter with cash and cash equivalents of $935 million and long-term debt, excluding debt issuance costs and discounts, of $37.2 billion. Also, escalating salaries and benefits expenses are eating into its profits. We expect it to jump more than 5% in 2024. Nevertheless, we believe that a systematic and strategic plan of action will drive the company’s long-term growth.
Other Key Picks
Some other top-ranked stocks in the broader medical space are Universal Health Services, Inc. (UHS - Free Report) , The Cigna Group (CI - Free Report) and Health Catalyst, Inc. (HCAT - Free Report) , each carrying a Zacks Rank #2 at present.
The Zacks Consensus Estimate for Universal Health Services’ 2024 bottom line suggests a 19.9% year-over-year improvement. UHS has witnessed three upward estimate revisions over the past 30 days against one movement in the opposite direction. It beat earnings estimates in all the last four quarters, with an average surprise of 5.9%.
The Zacks Consensus Estimate for Cigna’s full-year 2024 earnings indicates a 13% year-over-year increase. CI beat earnings estimates in each of the past four quarters, with an average surprise of 2.9%. The consensus mark for revenues predicts a 20.4% growth from the year-ago period.
The Zacks Consensus Estimate for Health Catalyst’s 2024 full-year earnings implies a 93.3% increase from the year-ago reported figure. The consensus mark for its current-year revenues is pegged at $308 million, indicating a 4.1% year-over-year increase. HCAT beat earnings estimates in each of the last four quarters, with an average surprise of 247.9%.