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Tenet Healthcare (THC) Exceeds Market Returns: Some Facts to Consider

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In the latest trading session, Tenet Healthcare (THC - Free Report) closed at $194.06, marking a +2.06% move from the previous day. The stock outperformed the S&P 500, which registered a daily gain of 0.44%. On the other hand, the Dow registered a gain of 0.14%, and the technology-centric Nasdaq increased by 0.7%.

The hospital operator's stock has climbed by 5.93% in the past month, exceeding the Medical sector's gain of 1.25% and the S&P 500's gain of 4.03%.

The investment community will be paying close attention to the earnings performance of Tenet Healthcare in its upcoming release. 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. In the meantime, our current consensus estimate forecasts the revenue to be $5.25 billion, indicating a 2.42% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $15.54 per share and a revenue of $21.15 billion, representing changes of +30.81% and +2.36%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Tenet Healthcare. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Tenet Healthcare is currently sporting a Zacks Rank of #1 (Strong Buy).

Looking at valuation, Tenet Healthcare is presently trading at a Forward P/E ratio of 12.23. This indicates a premium in contrast to its industry's Forward P/E of 10.77.

One should further note that THC currently holds a PEG ratio of 0.83. 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 was holding an average PEG ratio of 1.05 at yesterday's closing price.

The Medical - Hospital industry is part of the Medical sector. At present, this industry carries a Zacks Industry Rank of 58, placing it within the top 24% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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