HCA Healthcare (HCA): Assessing Valuation After Third Quarter Earnings Beat and Upward Revenue Guidance

HCA Healthcare reported third quarter results that surpassed expectations, supported by higher Medicaid supplemental payments, growing patient volumes, and tight cost management. The market has responded to momentum in both revenue growth and operational strategy.

See our latest analysis for HCA Healthcare.

HCA Healthcare has enjoyed a strong run, with a recent 12.2% share price return over the past month and a remarkable year-to-date price return of 60.6% as operational highlights stack up. The latest earnings beat, continued buybacks, and wins such as its Gold and White Star Kids Camp event have kept momentum building for both the share price and total returns. These returns stand at an impressive 43.8% over one year and more than 100% across three years.

For anyone tracking what’s happening across the healthcare sector, it’s a great moment to discover See the full list for free.

With shares touching new highs and guidance moving upward, the question facing investors is clear: Is HCA Healthcare still trading at a discount, or has the recent surge already priced in what comes next?

Most Popular Narrative: 0% Overvalued (Fairly Valued)

With HCA Healthcare’s most widely followed fair value estimate sitting just above the last close, the stage is set for debate. Fresh upgrades and strong reported numbers are being weighed carefully against recent price action.

The analysts have a consensus price target of $398.571 for HCA Healthcare based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $449.0, and the most bearish reporting a price target of just $333.0.

Read the complete narrative.

Curious what’s fueling analyst conviction? The secret sauce is not just about margins or guidance. It is the specific financial leaps they are betting on, underpinned by projections and numbers the market has not fully absorbed. Think you know what is really supporting that latest price target? Dive deeper, because the narrative’s assumptions may surprise you.

Result: Fair Value of $476.67 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing policy uncertainty and potential changes in Medicaid reimbursement could shift expectations. These factors present real catalysts that may challenge the current outlook.

Find out about the key risks to this HCA Healthcare narrative.

Another View: What Does the Market Multiple Say?

Let’s put analyst targets aside and look at how HCA Healthcare stacks up using its price-to-earnings ratio. At 17.2x, the company is priced lower than the healthcare industry average of 21.8x and the peer average of 18.8x. The fair ratio calculated by regression is much higher at 29.2x.

This gap suggests investors are pricing in more uncertainty or risk than a pure model would imply. Is the market being too cautious about HCA, or is it recognizing concerns others might be missing?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own HCA Healthcare Narrative

If you have your own perspective or want to see the story from a fresh angle, you can quickly craft your own narrative in just a few minutes. Do it your way

A great starting point for your HCA Healthcare research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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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