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Universal Health Services Inc

UHS

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Universal Health Services Inc AI Insights

Informational only. Not investment advice.
As of 2025-12-08

Snapshot

  • EPS growth 54% (1Y) and 33% (3Y) vastly exceeds industry median of 4% - operating leverage inflection underway[EPS Growth 1Y]
  • ROE of 20% TTM vs industry median 1.6% - 12x advantage with ROIC 11.5% on 5.1B debt load[Return on Equity]
  • P/E of 10.8x vs industry median 28.9x - 63% discount despite superior profitability metrics[P/E Ratio]

Watch Triggers

  • Operating Margin: Falls below 10%Signals labor cost inflation or reimbursement pressure eroding margin expansion thesis
  • Accounts Receivable: Exceeds 60 days sales outstandingA/R of 2.6B already high (55 days) - deterioration signals payer collection issues
  • Interest Expense: Exceeds 200M annuallyWould consume 10%+ of operating income, pressuring FCF conversion

Bull Case

Deep value at 10.8x P/E with 20% ROE and 33% 3Y EPS CAGR - market pricing in risks that haven't materialized

P/E RatioReturn on EquityEPS Growth 3Y

FCF of 950M TTM (5.6% yield) funds debt paydown and buybacks while maintaining 1B capex for growth

Free Cash FlowCapital ExpenditureDebt to Equity

Bear Case

Debt of 5.1B (0.71x equity) with 150M interest expense consumes 8% of operating income - rate sensitivity

Total DebtInterest ExpenseDebt to Equity

Goodwill of 4B is 56% of equity - acquisition-driven growth carries impairment risk in downturn

GoodwillCommon Stockholders Equity

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
60%

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Forward Thesis

Margin expansion to continue as behavioral health segment scales with fixed-cost leverage

1-3ymed
  • Operating margin 11.5% with room vs 90% gross margin
  • G&A of 2.1B (12% of revenue) offers efficiency upside
  • Capex of 1B annually building capacity
EPS growth 54% 1Y vs revenue growth impliedOperating income 1.9B TTM on 17B revenueFCF 950M despite heavy capex

Valuation Context

Caveats

Data Partners
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Fundamental company data provided by Morningstar, updated daily.

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