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Tenet Healthcare (THC) Stock Sinks As Market Gains: Here's Why

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In the latest trading session, Tenet Healthcare (THC - Free Report) closed at $191.78, marking a -2.35% move from the previous day. The stock's performance was behind the S&P 500's daily gain of 0.3%. Elsewhere, the Dow saw a downswing of 0.48%, while the tech-heavy Nasdaq appreciated by 0.03%.

Prior to today's trading, shares of the hospital operator had gained 15.2% outpaced the Medical sector's gain of 7.07% and the S&P 500's gain of 2.09%.

The investment community will be closely monitoring the performance of Tenet Healthcare in its forthcoming earnings report. It is anticipated that the company will report an EPS of $3.35, marking a 14.33% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $5.25 billion, reflecting a 2.42% rise from the equivalent quarter last year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $15.54 per share and a revenue of $21.15 billion, signifying shifts of +30.81% and +2.36%, respectively, from the last year.

Investors should also note any recent changes to analyst estimates for Tenet Healthcare. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Tenet Healthcare is currently sporting a Zacks Rank of #1 (Strong Buy).

In the context of valuation, Tenet Healthcare is at present trading with a Forward P/E ratio of 12.64. This expresses a premium compared to the average Forward P/E of 10.77 of its industry.

It's also important to note that THC currently trades at a PEG ratio of 0.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Medical - Hospital industry had an average PEG ratio of 1.08 as trading concluded yesterday.

The Medical - Hospital industry is part of the Medical sector. This group has a Zacks Industry Rank of 58, putting it in the top 24% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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