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Tenet (THC) Up 4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Tenet Healthcare (THC - Free Report) . Shares have added about 4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Tenet due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Tenet Q3 Earnings Beats Estimates on Strong Ambulatory Care Unit
Tenet Healthcare reported third-quarter 2025 adjusted earnings per share (EPS) of $3.70, which surpassed the Zacks Consensus Estimate by 11.1%. The bottom line increased 26.3% year over year.
Net operating revenues advanced 3.2% year over year to $5.3 billion. The top line beat the consensus mark by 1%.
The quarterly results benefited from higher same-facility revenues, a favorable payer mix and improved acuity, which led to strong performance of the Hospital Operations and Services segment. Facility buyouts boosted the performance of the Ambulatory Care segment. However, the upside was partly offset by rising operating costs, particularly supplies expense.
Inside THC’s Q3 Performance
Adjusted net income of $328 million climbed 16.3% year over year in the quarter under review.
Adjusted EBITDA improved 12.4% year over year to $1.1 billion, higher than our estimate of $1 billion. The year-over-year growth was backed by improved same-facility revenues, higher acuity, a favorable payer mix and prudent expense management efforts. Adjusted EBITDA margin of 20.8% improved 170 basis points (bps) year over year.
Total operating costs increased 8.9% year over year to $4.5 billion in the third quarter due to a higher supplies expense.
Q3 Segmental Details of Tenet Healthcare
Hospital Operations and Services: The segment recorded net operating revenues of $4 billion, which inched up 0.7% year over year on the back of improved same-hospital admissions, higher acuity and favorable payer mix. The metric beat the Zacks Consensus Estimate by 0.6% and our estimate by 0.8%. Nevertheless, on a same-hospital basis, net patient service revenues grew 7.5% year over year.
Adjusted EBITDA climbed 12.6% year over year to $607 million in the third quarter, driven by higher same-facility revenues, a favorable payer mix and prudent expense management efforts. The metric surpassed the consensus mark of $563.8 million and our estimate of $562.1 million. Adjusted EBITDA margin of 15.1% improved 160 bps year over year.
Ambulatory Care: The segment’s net operating revenues rose 11.9% year over year to $1.3 billion in the quarter under review on the back of improved same-facility net patient services revenues, facility buyouts and expansion of service lines. The metric topped the Zacks Consensus Estimate by 1.1% and our estimate by 3.2%.
Adjusted EBITDA was $492 million, which advanced 12.1% year over year, attributable to facility buyouts, prudent expense management efforts and solid same-facility net patient service revenue growth. The metric beat the consensus mark of $473.9 million and our estimate of $463.1 million. Adjusted EBITDA margin improved 10 bps year over year at 38.6%.
THC’s Financial Position (as of Sept. 30, 2025)
Tenet Healthcare exited the third quarter with cash and cash equivalents of $3 billion, which declined 1.5% from the 2024-end level.
Total assets of $29.4 billion rose from the figure of $28.9 billion at 2024-end.
Long-term debt, net of the current portion, amounted to $13.1 billion, which inched up marginally from the figure as of Dec. 31, 2024. The current portion of long-term debt totaled $85 million.
Total shareholders’ equity of $4 billion decreased 3.8% from the 2024-end level.
THC generated $2.8 billion of net cash from operations in the first nine months of 2025, which advanced 18.1% year over year. Free cash flows improved 21.7% year over year to $2.2 billion in the first nine months of 2025.
THC’s Share Repurchase Update
THC bought back common shares worth $93 million in the third quarter of 2025. As of Sept. 30, 2025, the company had a leftover share repurchase authorization of around $1.7 billion.
Tenet Raises Outlook for 2025
Net operating revenues are currently expected to be within $21.15-$21.35 billion, higher than the earlier view of $20.95-$21.25 billion. The midpoint of the revised guidance indicates 2.8% growth from the 2024 figure.
Net operating revenues of the Hospital segment are now forecasted to lie between $16.05 billion and $16.2 billion, higher than the prior guidance of $15.95-$16.1 billion. The metric at the Ambulatory Care unit is estimated at $5.1-$5.15 billion, up from the previous view of $5-$5.15 billion.
Adjusted EBITDA is likely to remain between $4.47 billion and $4.57 billion for 2025, higher than the prior view of $4.4-$4.54 billion. The midpoint of the updated guidance indicates 13% growth from the 2024 figure. Adjusted EBITDA margin is estimated to be in the 21.1-21.4% band compared with the earlier view of 21-21.4%.
Adjusted net income is now projected to be between $1.45 billion and $1.48 billion, up from the prior outlook of $1.415-$1.475 billion. Adjusted EPS is presently anticipated within $15.93-$16.26, up from the earlier view of $15.55-$16.21. The midpoint of the revised outlook implies a 35.5% rise from the 2024 figure. Interest expense is still estimated between $815 million and $825 million.
Net cash provided by operating activities is now expected to be between $3.15 billion and $3.5 billion. Free cash flow is now estimated to remain between $2.275 billion and $2.525 billion. Capital expenditures are projected in the range of $875-$975 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Tenet has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Tenet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Tenet is part of the Zacks Medical - Hospital industry. Over the past month, Universal Health Services (UHS - Free Report) , a stock from the same industry, has gained 8.4%. The company reported its results for the quarter ended September 2025 more than a month ago.
Universal Health Services reported revenues of $4.5 billion in the last reported quarter, representing a year-over-year change of +13.4%. EPS of $5.69 for the same period compares with $3.71 a year ago.
Universal Health Services is expected to post earnings of $5.87 per share for the current quarter, representing a year-over-year change of +19.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.3%.
Universal Health Services has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Tenet (THC) Up 4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Tenet Healthcare (THC - Free Report) . Shares have added about 4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Tenet due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Tenet Q3 Earnings Beats Estimates on Strong Ambulatory Care Unit
Tenet Healthcare reported third-quarter 2025 adjusted earnings per share (EPS) of $3.70, which surpassed the Zacks Consensus Estimate by 11.1%. The bottom line increased 26.3% year over year.
Net operating revenues advanced 3.2% year over year to $5.3 billion. The top line beat the consensus mark by 1%.
The quarterly results benefited from higher same-facility revenues, a favorable payer mix and improved acuity, which led to strong performance of the Hospital Operations and Services segment. Facility buyouts boosted the performance of the Ambulatory Care segment. However, the upside was partly offset by rising operating costs, particularly supplies expense.
Inside THC’s Q3 Performance
Adjusted net income of $328 million climbed 16.3% year over year in the quarter under review.
Adjusted EBITDA improved 12.4% year over year to $1.1 billion, higher than our estimate of $1 billion. The year-over-year growth was backed by improved same-facility revenues, higher acuity, a favorable payer mix and prudent expense management efforts. Adjusted EBITDA margin of 20.8% improved 170 basis points (bps) year over year.
Total operating costs increased 8.9% year over year to $4.5 billion in the third quarter due to a higher supplies expense.
Q3 Segmental Details of Tenet Healthcare
Hospital Operations and Services: The segment recorded net operating revenues of $4 billion, which inched up 0.7% year over year on the back of improved same-hospital admissions, higher acuity and favorable payer mix. The metric beat the Zacks Consensus Estimate by 0.6% and our estimate by 0.8%. Nevertheless, on a same-hospital basis, net patient service revenues grew 7.5% year over year.
Adjusted EBITDA climbed 12.6% year over year to $607 million in the third quarter, driven by higher same-facility revenues, a favorable payer mix and prudent expense management efforts. The metric surpassed the consensus mark of $563.8 million and our estimate of $562.1 million. Adjusted EBITDA margin of 15.1% improved 160 bps year over year.
Ambulatory Care: The segment’s net operating revenues rose 11.9% year over year to $1.3 billion in the quarter under review on the back of improved same-facility net patient services revenues, facility buyouts and expansion of service lines. The metric topped the Zacks Consensus Estimate by 1.1% and our estimate by 3.2%.
Adjusted EBITDA was $492 million, which advanced 12.1% year over year, attributable to facility buyouts, prudent expense management efforts and solid same-facility net patient service revenue growth. The metric beat the consensus mark of $473.9 million and our estimate of $463.1 million. Adjusted EBITDA margin improved 10 bps year over year at 38.6%.
THC’s Financial Position (as of Sept. 30, 2025)
Tenet Healthcare exited the third quarter with cash and cash equivalents of $3 billion, which declined 1.5% from the 2024-end level.
Total assets of $29.4 billion rose from the figure of $28.9 billion at 2024-end.
Long-term debt, net of the current portion, amounted to $13.1 billion, which inched up marginally from the figure as of Dec. 31, 2024. The current portion of long-term debt totaled $85 million.
Total shareholders’ equity of $4 billion decreased 3.8% from the 2024-end level.
THC generated $2.8 billion of net cash from operations in the first nine months of 2025, which advanced 18.1% year over year. Free cash flows improved 21.7% year over year to $2.2 billion in the first nine months of 2025.
THC’s Share Repurchase Update
THC bought back common shares worth $93 million in the third quarter of 2025. As of Sept. 30, 2025, the company had a leftover share repurchase authorization of around $1.7 billion.
Tenet Raises Outlook for 2025
Net operating revenues are currently expected to be within $21.15-$21.35 billion, higher than the earlier view of $20.95-$21.25 billion. The midpoint of the revised guidance indicates 2.8% growth from the 2024 figure.
Net operating revenues of the Hospital segment are now forecasted to lie between $16.05 billion and $16.2 billion, higher than the prior guidance of $15.95-$16.1 billion. The metric at the Ambulatory Care unit is estimated at $5.1-$5.15 billion, up from the previous view of $5-$5.15 billion.
Adjusted EBITDA is likely to remain between $4.47 billion and $4.57 billion for 2025, higher than the prior view of $4.4-$4.54 billion. The midpoint of the updated guidance indicates 13% growth from the 2024 figure. Adjusted EBITDA margin is estimated to be in the 21.1-21.4% band compared with the earlier view of 21-21.4%.
Adjusted net income is now projected to be between $1.45 billion and $1.48 billion, up from the prior outlook of $1.415-$1.475 billion. Adjusted EPS is presently anticipated within $15.93-$16.26, up from the earlier view of $15.55-$16.21. The midpoint of the revised outlook implies a 35.5% rise from the 2024 figure. Interest expense is still estimated between $815 million and $825 million.
Net cash provided by operating activities is now expected to be between $3.15 billion and $3.5 billion. Free cash flow is now estimated to remain between $2.275 billion and $2.525 billion. Capital expenditures are projected in the range of $875-$975 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Tenet has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Tenet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Tenet is part of the Zacks Medical - Hospital industry. Over the past month, Universal Health Services (UHS - Free Report) , a stock from the same industry, has gained 8.4%. The company reported its results for the quarter ended September 2025 more than a month ago.
Universal Health Services reported revenues of $4.5 billion in the last reported quarter, representing a year-over-year change of +13.4%. EPS of $5.69 for the same period compares with $3.71 a year ago.
Universal Health Services is expected to post earnings of $5.87 per share for the current quarter, representing a year-over-year change of +19.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.3%.
Universal Health Services has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.