NEW YORK (TheStreet) -- Universal Health Services (UHS) - Get Report shares are up 7.46% to $140.43 in trading on Thursday after the U.S. Supreme Court  upheld a key portion of the Affordable Care Act today.

The Supreme Court ruled that the subsidies at the heart of the law were in fact legal because they are being offered in the form of tax credits available to people in every state.

The decision was made on a 6-3 split with conservative Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissenting against the majority opinion.

Chief Justice John Roberts wrote the majority opinion of the court.

The legality of of the law has been argued by Republicans and Democrats even before it was first signed into law by the Obama administration in 2010.

Other healthcare industry stocks such as Tenet Healthcare (THC) - Get Report and Community Health Systems (CYH) - Get Report are also gaining today following the ruling. 

TheStreet Ratings team rates UNIVERSAL HEALTH SVCS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNIVERSAL HEALTH SVCS INC (UHS) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • UHS's revenue growth has slightly outpaced the industry average of 13.0%. Since the same quarter one year prior, revenues rose by 14.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 25.36% and other important driving factors, this stock has surged by 38.55% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UHS should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • UNIVERSAL HEALTH SVCS INC has improved earnings per share by 25.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNIVERSAL HEALTH SVCS INC increased its bottom line by earning $5.42 versus $5.13 in the prior year. This year, the market expects an improvement in earnings ($6.55 versus $5.42).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 26.2% when compared to the same quarter one year prior, rising from $138.08 million to $174.30 million.
  • You can view the full analysis from the report here: UHS Ratings Report