Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 4 Nov, 25 | THC | Buy | USD 201.39 | USD 211.0 | USD 228.0 | 99 days | Closed |
13.61%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Tenet Healthcare Corporation operates as a diversified healthcare services company. The company operates through three segments: Hospital Operations, Ambulatory Care, and Conifer. Its general hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies. The company also provides intensive and critical care, and/or coronary care units; cardiovascular, digestive disease, neurosciences, musculoskeletal, and obstetrics services; outpatient services, including physical therapy; cardiothoracic surgery, complex spinal surgery, neonatal intensive care, and neurosurgery services; quaternary care services in heart and kidney transplants; and limb-salvaging vascular procedure, acute level 1 trauma, intravascular stroke care, minimally invasive cardiac valve replacement, imaging, and telemedicine access services. In addition, it operates ambulatory surgery centers, imaging centers, surgical hospitals, off-campus emergency departments, and micro-hospitals. Further, the company offers end-to-end and focused-point business process services in the areas of hospital and physician revenue cycle management, patient communications and engagement support, and value-based care solutions to hospitals, health systems, physician practices, employers, and other customers. Tenet Healthcare Corporation was founded in 1967 and is headquartered in Dallas, Texas.
Free Cash Flow Growth: Free cash flow increased 21% year-over-year, rising from USD 829 million in Q3 FY2024 to USD 778 million in Q3 FY2025, after higher capital expenditures. On an adjusted basis, free cash flow improved to USD 781 million, demonstrating enhanced cash conversion and capital discipline
EBITDA and Profitability Expansion: Tenet reported USD 1.099 billion Adjusted EBITDA in Q3 FY2025, compared to USD 978 million in Q3 FY2024, representing a 12% increase. The Adjusted EBITDA margin improved from 19.1% to 20.8%, reflecting better cost control and higher operational efficiency
Reduction in Diluted EPS: Diluted EPS decreased from USD 4.89 in Q3 FY2024 to USD 3.86 in Q3 FY2025, marking a 21% decline, reflecting lower net income despite higher operating earnings
Decline in Net Income: Net income attributable to shareholders fell to USD 342 million in Q3 FY2025 from USD 472 million in Q3 FY2024, a 27.5% decrease, mainly due to the absence of large one-time gains from asset sales and consolidation activities seen in the prior year
Tenet Healthcare faces exposure to reimbursement rate volatility and regulatory risks that could materially affect margins and cash flow across its hospital and ambulatory segments, particularly if cost inflation outpaces payer mix improvements
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 201.39 | 170.0 | 211.0 | 228.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Strong Operating and Financial Performance: Tenet Healthcare Corporation delivered robust financial results in the third quarter of FY2025, exceeding the upper end of its EBITDA outlook. Consolidated Adjusted EBITDA rose to USD 1.099 billion, reflecting a 12% year-over-year increase compared to Q3 FY2024. The company achieved an Adjusted EBITDA margin of 20.8%, up from 19.1% in the prior year period. Net operating revenues grew to USD 5.29 billion, underscoring continued growth across both ambulatory and hospital segments.
Segmental Growth Momentum: The Ambulatory segment continued to be a key growth driver, recording 12% Adjusted EBITDA growth and 8.3% same-facility revenue growth, supported by network expansion through 13 new facilities during the quarter. The Hospital segment also demonstrated resilience, delivering 13% Adjusted EBITDA growth and 7.5% same-hospital revenue growth. Same-hospital adjusted admissions rose modestly by 1.4%, indicating stable patient volumes and favorable pricing mix. Together, these segments contributed to an improved overall profitability profile.
Strengthened Balance Sheet and Cash Flow Generation: Tenet showcased substantial progress in strengthening its balance sheet, achieving a leverage ratio of 2.30x EBITDA (2.93x EBITDA-NCI), down sharply from 4.85x in FY2023. The company ended Q3 FY2025 with USD 2.98 billion in cash on hand and an additional USD 1.5 billion in unused credit lines, highlighting strong liquidity. Free cash flow stood at USD 778 million for the quarter and USD 2.16 billion year-to-date, reflecting operational efficiency and disciplined capital management.
Capital Allocation and Shareholder Returns: Tenet’s capital deployment remains balanced between growth and shareholder returns. During Q3 FY2025, the company invested USD 290 million in M&A and de novo activity, acquiring 11 ambulatory centers and opening 2 new facilities. In addition, it repurchased approximately 0.6 million shares for USD 93 million, bringing the year-to-date total to 7.8 million shares for USD 1.2 billion. Management reiterated its commitment to maintaining a deleveraged balance sheet while pursuing accretive investments in high-acuity service lines and technology.
Upward Revision to FY2025 Outlook: The company raised its FY2025 guidance, projecting consolidated Adjusted EBITDA between USD 4.47 billion and USD 4.57 billion, up from its prior range of USD 3.975–USD 4.175 billion. Adjusted Free Cash Flow (excluding NCI distributions) was revised upward by USD 250 million to a range of USD 1.495–USD 1.695 billion. The updated outlook reflects management’s confidence in sustained margin expansion and continued operational leverage across its diversified healthcare portfolio.
Expansion of Ambulatory Network and Operational Efficiency: Tenet’s subsidiary, United Surgical Partners International (USPI), sustained its long-term trajectory of mid-teens growth, with 2025 expected net revenues of USD 5.1 billion and Adjusted EBITDA of USD 2.02 billion, translating to a 14.5% EBITDA CAGR since 2019. The company also maintained an approximate 40% EBITDA margin in this segment. Expansion into high-acuity procedures, particularly musculoskeletal and gastrointestinal services, coupled with disciplined development of new service lines, has reinforced USPI’s market leadership and return on invested capital.
Commitment to Quality and Strategic Growth: Tenet continues to emphasize clinical quality and patient experience, achieving a 96.6 patient satisfaction score in 2024. The company’s disciplined approach to acquisitions and de novo developments has yielded effective acquisition multiples of 5–7x and de novo multiples below 2.0x, exceeding its targeted returns. This operational discipline supports Tenet’s long-term strategy of sustainable growth through high-margin service lines and capital efficiency.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Tenet Healthcare Corporation (NYSE: THC) at the closing market price of USD 201.39, as on Nov 03, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Healthcare Industry: Medical Care Facilities
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| THC Tenet Healthcare Corporation |
-5.93 3.32% | 172.57 | 17.54 | 12.25 | 0.37 | 5.24 | 1.07 | 6.81 |
| HCA HCA Healthcare, Inc. |
-12.99 3.35% | 375.17 | 13.19 | 13.66 | 1.13 | 293.44 | 1.77 | 8.22 |
| FSNUY Fresenius SE & Co KGaA ADR |
0.09 0.81% | 11.27 | 16.87 | 9.44 | 0.42 | 0.78 | 0.79 | 5.37 |
| JDHIY JD Health International Inc |
- -% | 5.33 | 62.50 | 35.97 | 0.30 | 2.32 | 0.16 | 3.90 |
| JDHIF JD Health International Inc |
- -% | 5.85 | 57.75 | 32.68 | 0.29 | 2.11 | 0.16 | 3.90 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on November 4, 2025. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
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Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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