Tenet Healthcare (THC) Valuation Check After Earnings Beat And Strengthened Analyst Confidence

Tenet Healthcare (THC) is back in focus after quarterly results that topped expectations, with revenue of $5.53b and a 37% year over year jump in adjusted EPS, prompting a wave of upbeat analyst commentary.

See our latest analysis for Tenet Healthcare.

The strong Q4 showing comes after a powerful run, with a 30 day share price return of 24.81% and a 1 year total shareholder return of 79.92%, building on a very large 5 year total shareholder return of over 3x.

If Tenet’s move has you rethinking where healthcare could go next, it might be a good time to scan 30 healthcare AI stocks as another potential hunting ground.

With the stock up sharply over the past year and analysts lifting targets, the key question now is whether Tenet still trades at a discount to its estimated worth or if the market is already pricing in future growth.

Most Popular Narrative: 17.7% Undervalued

Tenet Healthcare’s most followed valuation narrative points to a fair value of $288 per share, above the recent $237.04 close, setting up a clear valuation gap for investors to assess.

The company's ongoing investment and expansion in its United Surgical Partners International (USPI) ambulatory platform, with healthy M&A and de novo pipeline targeting high-acuity, high-margin service lines such as orthopedics, is shifting Tenet’s portfolio toward outpatient care; this shift enhances net margins as USPI delivers EBITDA margins near 38%, materially higher than legacy hospital operations.

Read the complete narrative.

Curious what earnings power sits behind that higher fair value, and what kind of margin profile and future P/E the narrative leans on? The full story spells out a detailed path for revenue, profits and valuation multiples that is very different from headline earnings forecasts.

Result: Fair Value of $288 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you still need to weigh the risk that a shift toward outpatient care, higher labor costs, or tighter reimbursement could pressure Tenet’s margins and earnings power.

Find out about the key risks to this Tenet Healthcare narrative.

Next Steps

If this mix of optimism and concern feels familiar, you are not alone. Take a moment to review the data yourself and move quickly to shape your own view, starting with 2 key rewards and 3 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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