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Thursday, October 22, 2020

Tenet Healthcare Corporation (NYSE:THC) on the Path to Profitability

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Tenet Healthcare Corporation (THC) shares are trading at higher $27.37 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $30.18.

To add more color to this target, the company’s high over the last year is $39.37 and the low is $10.00. Over the last 52 weeks, THC is up 27.78% while the S&P 500 is up 18.10%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, THC reported a profit of $1.17 billion. Tenet Healthcare Corporation also saw revenues increase to $3.65 billion. In addition, THC has free cash flow of $2.08 billion as of 06-2020. The company’s EBITDA came in at $718.0 million which compares well with its peers.

THC booked profit margins of -0.30%, its Return on Equity (ROE) is 14.30%, and its Return on Assets is -0.20%. All told, it is clear that, THC needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. THC has a short ratio of 5.22 and outstanding shares of 104.79M.

Company Outlook

THC has seen increased volume after this news and investors are putting their support behind the value proposition. Traders will also note the company’s earnings per share came in at -0.51. Tenet Healthcare Corporation THC also noted assets of $26.25 billion at the end of the last quarter. Investors should also keep an eye on sector updates as THC has historically followed its peers on positive news.

All told, Tenet Healthcare Corporation THC has strung together solid data and demonstrated underlying fundamentals. At its current valuation, THC represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Tenet Healthcare Corporation THC is now commanding a market cap of 2.78B and a float of 103.52M. THC is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of THC stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in THC, either long or short, and we have not been compensated for this article.

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