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Can Tenet Healthcare Sustain Growth Despite Lower Surgical Volumes?
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Key Takeaways
Tenet Healthcare's revenues rose 6.8% despite declines in hospital and ambulatory surgical cases.
USPI revenue per case climbed 6.3%, helping ambulatory revenue and adjusted EBITDA grow.
Tenet Healthcare raised 2026 adjusted EBITDA guidance to $4.83-$5.03 billion.
Tenet Healthcare Corporation’s (THC - Free Report) growth remains intact despite softer surgical volumes. In the second quarter of 2026, same-facility system-wide surgical cases at United Surgical Partners International (“USPI”), Tenet’s ambulatory surgery business, fell 1.2% year over year, while hospital surgeries declined 0.7%. Consolidated net operating revenues rose 6.8% to $5.63 billion, demonstrating that lower procedure volumes have not hindered revenue growth.
USPI benefited from a 6.3% rise in revenue per case, helping ambulatory revenues increase 9.3%. The gain reflected higher acuity and favorable service mix, while acquisitions and added service lines provided additional support. Higher revenue per case more than offset weaker case volumes, helping ambulatory adjusted EBITDA increase 8.8% to $542 million. This suggests USPI’s growth is becoming less dependent on surgical volumes alone.
The hospital business also shows that lower surgical volumes have not materially weakened operations. Hospital surgeries declined 0.7%, but adjusted admissions increased 2.6%. Revenue per adjusted admission grew 3.3%. This helped hospital adjusted EBITDA rise 22.3% to $762 million, with the margin expanding to 18.0% from 15.6%. The EBITDA improvement also benefited from $92 million of prior-year Medicaid supplemental revenues versus $70 million a year earlier.
THC’s raised 2026 adjusted EBITDA guidance of $4.83-$5.03 billion supports continued earnings growth. The company expects hospital adjusted admissions to rise 1-2% and USPI same-facility system-wide revenues to grow 3-6% for the year. Continued gains in acuity, favorable service mix and revenue per case should help offset softer surgical volumes and support further growth.
Peer Performance
Tenet’s healthcare peers, including Universal Health Services, Inc. (UHS - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) , also reported solid volume and revenue trends in the second quarter of 2026.
Universal Health Services is also benefiting from higher revenue per patient. In the second quarter of 2026, adjusted admissions increased 2.9%, while revenue per adjusted admission rose 3%. UHS’ behavioral-health revenues grew 7.4%, supporting overall revenue growth.
HCA Healthcare is seeing steady demand across its hospital network. In the second quarter of 2026, admissions increased 2.4%, while revenue per equivalent admission rose 6% year over year. Higher revenue intensity and Medicaid supplemental payments supported growth, while emergency-room visits also increased.
THC’s Price Performance, Valuation & Estimates
Shares of Tenet Healthcare have gained 30.4% over the past year compared with the industry's 12.7% growth over the same period.
Image Source: Zacks Investment Research
From a valuation standpoint, THC trades at a forward price-to-earnings ratio of 12.28X, up from the industry average of 10.95X. THC carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for THC’s 2026 earnings is pegged at $21.04 per share, implying a 25.4% jump from the year-ago period’s level.
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Can Tenet Healthcare Sustain Growth Despite Lower Surgical Volumes?
Key Takeaways
Tenet Healthcare Corporation’s (THC - Free Report) growth remains intact despite softer surgical volumes. In the second quarter of 2026, same-facility system-wide surgical cases at United Surgical Partners International (“USPI”), Tenet’s ambulatory surgery business, fell 1.2% year over year, while hospital surgeries declined 0.7%. Consolidated net operating revenues rose 6.8% to $5.63 billion, demonstrating that lower procedure volumes have not hindered revenue growth.
USPI benefited from a 6.3% rise in revenue per case, helping ambulatory revenues increase 9.3%. The gain reflected higher acuity and favorable service mix, while acquisitions and added service lines provided additional support. Higher revenue per case more than offset weaker case volumes, helping ambulatory adjusted EBITDA increase 8.8% to $542 million. This suggests USPI’s growth is becoming less dependent on surgical volumes alone.
The hospital business also shows that lower surgical volumes have not materially weakened operations. Hospital surgeries declined 0.7%, but adjusted admissions increased 2.6%. Revenue per adjusted admission grew 3.3%. This helped hospital adjusted EBITDA rise 22.3% to $762 million, with the margin expanding to 18.0% from 15.6%. The EBITDA improvement also benefited from $92 million of prior-year Medicaid supplemental revenues versus $70 million a year earlier.
THC’s raised 2026 adjusted EBITDA guidance of $4.83-$5.03 billion supports continued earnings growth. The company expects hospital adjusted admissions to rise 1-2% and USPI same-facility system-wide revenues to grow 3-6% for the year. Continued gains in acuity, favorable service mix and revenue per case should help offset softer surgical volumes and support further growth.
Peer Performance
Tenet’s healthcare peers, including Universal Health Services, Inc. (UHS - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) , also reported solid volume and revenue trends in the second quarter of 2026.
Universal Health Services is also benefiting from higher revenue per patient. In the second quarter of 2026, adjusted admissions increased 2.9%, while revenue per adjusted admission rose 3%. UHS’ behavioral-health revenues grew 7.4%, supporting overall revenue growth.
HCA Healthcare is seeing steady demand across its hospital network. In the second quarter of 2026, admissions increased 2.4%, while revenue per equivalent admission rose 6% year over year. Higher revenue intensity and Medicaid supplemental payments supported growth, while emergency-room visits also increased.
THC’s Price Performance, Valuation & Estimates
Shares of Tenet Healthcare have gained 30.4% over the past year compared with the industry's 12.7% growth over the same period.
Image Source: Zacks Investment Research
From a valuation standpoint, THC trades at a forward price-to-earnings ratio of 12.28X, up from the industry average of 10.95X. THC carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for THC’s 2026 earnings is pegged at $21.04 per share, implying a 25.4% jump from the year-ago period’s level.
Image Source: Zacks Investment Research
THC currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.