Has HCA’s Hospital Expansion Sparked a True Bargain for Investors in 2025?

• Curious if HCA Healthcare is actually a bargain, or just riding the latest wave? Let's cut through the noise and get you a clear answer.
• The stock has jumped 2.9% over the past week and is up 10.9% in the last month, with a staggering 58.7% gain year-to-date, hinting at both growth potential and shifting market sentiment.
• Recent headlines have focused on HCA’s ambitious plans to expand its hospital network and invest further in specialized care, moves that have attracted investor attention. This strategic push is shaping how the market views HCA’s future prospects and is likely influencing its strong share performance.
• Right now, HCA Healthcare scores a solid 5 out of 6 on our undervaluation checks, making it worth a closer look. We’ll discuss the typical valuation approaches next, so stay tuned for the most insightful angle on HCA’s real worth at the end.

HCA Healthcare delivered 41.9% returns over the last year. See how this stacks up to the rest of the Healthcare industry.

Approach 1: HCA Healthcare Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates the intrinsic value of a company by projecting its future cash flows and discounting them to today's value. This approach provides an assessment of what HCA Healthcare could be worth based on both actual and expected financial performance.

For HCA Healthcare, the current Free Cash Flow stands at $7.67 Billion. Analysts provide projections for the next several years, and by 2029, Free Cash Flow is expected to reach $8.15 Billion. After analyst estimates end, Simply Wall St extrapolates figures for the following years. These projections indicate a steady climb, with 2035’s estimated Free Cash Flow reaching $10.22 Billion.

Based on these projections and the two-stage DCF approach, HCA Healthcare’s intrinsic value is estimated at $899.69 per share. This figure is 47.5% above the current share price, meaning the stock is considered significantly undervalued according to the DCF model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests HCA Healthcare is undervalued by 47.5%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for HCA Healthcare.

Approach 2: HCA Healthcare Price vs Earnings

The Price-to-Earnings (PE) ratio is a preferred valuation method for profitable companies like HCA Healthcare because it directly compares a company’s market price with its earnings. This provides a simple snapshot of how much investors are willing to pay for each dollar of profit. For steady earners, the PE ratio is especially illuminating when weighing growth prospects against the risks of the business.

A "normal" or "fair" PE ratio varies between industries and is influenced by both growth outlook and risk. Higher expected growth or lower risk typically justifies a higher PE. HCA Healthcare currently trades on a PE of 17x, which is below both the peer group average of 18.76x and the Healthcare industry average of 21.58x. This makes the stock look inexpensive compared to its broader sector and similar companies.

While comparing to peers and industry benchmarks is useful, Simply Wall St’s proprietary “Fair Ratio” goes further by factoring in specific growth rates, profit margins, company size, and unique risks. For HCA Healthcare, the Fair Ratio is 29.13x, which is comfortably above the company’s current multiple. This suggests that, after accounting for its growth, profitability and risk profile, the market is undervaluing the stock based on earnings.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your HCA Healthcare Narrative

Earlier, we mentioned that there is an even better way to understand valuation, so now let’s introduce you to Narratives. A Narrative is a clear story, your personal perspective on a company’s future, that connects the dots between its business outlook, your financial assumptions (like revenue, earnings, and margins), and the fair value you assign to the stock.

Narratives help you see beyond just numbers; they let you anchor a company’s journey and prospects to real-world events and data. With Narratives on Simply Wall St’s Community page, used by millions of investors, anyone can create or explore different scenarios for HCA Healthcare based on their own beliefs and available information.

This tool empowers you to decide when to buy, hold, or sell by comparing what you think the shares are worth (Fair Value) to the current Price. Narratives are automatically refreshed whenever new earnings or news is released, so your viewpoint stays relevant.

For example, some investors might be bullish and see HCA’s fair value as high as $449.00 per share, banking on strong policy tailwinds and efficiency gains, while bearish perspectives might value it at just $333.00 due to regulatory risks and policy uncertainty. This highlights how each story can shape a unique investment decision with the latest data.

Do you think there's more to the story for HCA Healthcare? Head over to our Community to see what others are saying!

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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