A Look at Tenet Healthcare’s (THC) Valuation After Surprising Earnings Beat and Raised Guidance

Tenet Healthcare posted third-quarter results that came in ahead of expectations, with both revenue and earnings beating forecasts. The company also nudged its full-year guidance higher, reinforcing optimism for the rest of 2025.

See our latest analysis for Tenet Healthcare.

Tenet Healthcare’s upbeat results and raised outlook appear to have fueled strong momentum in the shares, with a 2.75% gain on results day and a 7% share price return in just the past month. Looking at a broader timeframe, momentum has been building for most of the year, as the shares have surged 73% year-to-date and delivered an impressive 55% total shareholder return over the past twelve months. This highlights both recent optimism and robust long-term execution.

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With shares trading near all-time highs and management lifting guidance again, investors are now left asking if Tenet is still undervalued given its growth outlook, or if the market is already factoring in future gains.

Most Popular Narrative: 2.3% Overvalued

With Tenet Healthcare shares recently closing at $216.17, the most widely followed narrative suggests the company’s fair value is slightly lower. That puts current pricing just above where analysts see justified value, offering little margin for error and raising the stakes on future performance.

Ongoing expansion of Tenet's ambulatory surgical center (USPI) footprint and consistent M&A activity in high-margin, high-acuity outpatient procedures (e.g., total joint replacements, spine surgery) are capitalizing on the industry shift towards outpatient care. This supports both revenue growth and future net margin expansion due to favorable case mix and operational scale.

Read the complete narrative.

Want to know what’s fueling this nearly break-even fair value estimate? There’s a bold projection for future margins and aggressive assumptions on outpatient shift. Which single catalyst could tip the scales for Tenet’s narrative value? Think it’s just steady growth? Click to see the numbers analysts are banking on.

Result: Fair Value of $211.29 (OVERVALUED)

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

However, persistent labor cost pressures or changes to Medicaid supplemental payments could quickly alter Tenet’s margin outlook and challenge this prevailing narrative.

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

Another View: Our DCF Model Points to Undervaluation

Taking a different approach, the SWS DCF model suggests Tenet Healthcare is significantly undervalued. While multiples-based valuations put the share price above fair value, the DCF model estimates fair value at $393.19, which is far above the current $216.17. Could the market be underappreciating long-term prospects?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Tenet Healthcare Narrative

If you see the story differently or want to dig into the numbers yourself, you can craft your personal view in just a few minutes. Do it your way

A great starting point for your Tenet Healthcare research is our analysis highlighting 2 key rewards and 3 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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