Is It Too Late To Consider Buying Universal Health Services, Inc. (NYSE:UHS)?

Universal Health Services, Inc. (NYSE:UHS), might not be a large cap stock, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Universal Health Services’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Universal Health Services

What's The Opportunity In Universal Health Services?

Good news, investors! Universal Health Services is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $189.88, but it is currently trading at US$136 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Universal Health Services’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Universal Health Services look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 7.8% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Universal Health Services, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since UHS is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on UHS for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy UHS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 2 warning signs with Universal Health Services, and understanding them should be part of your investment process.

If you are no longer interested in Universal Health Services, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.