Tenet Healthcare Corp

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THC : NYSE : Health Care
$15.89 up 0.31 | 2.0%
Today's Range: 15.36 - 15.95
Avg. Daily Volume: 3785100.0
08/23/17 - 12:09 PM ET

Financial Analysis


TENET HEALTHCARE CORP's gross profit margin for the second quarter of its fiscal year 2017 has decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. TENET HEALTHCARE CORP has weak liquidity. Currently, the Quick Ratio is 0.82 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 28.68% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)4802.04868.0
EBITDA ($mil)523.0594.0
EBIT ($mil)301.0379.0
Net Income ($mil)-55.0-46.0


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)475.0656.0
Total Assets ($mil)24341.024240.0
Total Debt ($mil)15155.014501.0
Equity ($mil)373.0523.0


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin10.8912.2
EBITDA Margin10.8912.2
Operating Margin6.277.79
Sales Turnover0.790.81
Return on Assets-0.8-0.95
Return on Equity-52.54-43.4
Debt Q2 FY17 Q2 FY16
Current Ratio1.241.13
Debt/Capital0.980.97
Interest Expense260.0244.0
Interest Coverage1.161.55


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)100.7199.52
Div / share0.00.0
EPS-0.56-0.44
Book value / share3.75.26
Institutional Own % n/a n/a
Avg Daily Volume3230094.04014307.0

Valuation


SELL. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. For additional comparison, its price-to-book ratio of 3.42 indicates a premium versus the S&P 500 average of 3.02 and a premium versus the industry average of 3.24. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, TENET HEALTHCARE CORP proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
THC NM Peers 24.29   THC 3.39 Peers 11.60

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

THC's P/E is negative making this valuation measure meaningless.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

THC is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
THC 9.92 Peers 16.60   THC NA Peers 0.74

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

THC is trading at a valuation on par with its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
THC 3.42 Peers 3.24   THC 14.42 Peers 23.84

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

THC is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, THC is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
THC 0.07 Peers 0.90   THC -1.56 Peers 8.44

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

THC is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

THC significantly trails its peers on the basis of sales growth

 

 

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