HCA Healthcare, Inc. HCA is supported by increasing patient admissions, acquisitions of healthcare facilities, an effective package of virtual care services and a remarkable financial position.

Zacks Rank & Price History

HCA currently has a Zacks Rank #1 (Strong Buy).

The share price rose 37.1% last year.

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Favorable Style Score

HCA Healthcare has an impressive Value Score of A. The Value Score helps to find undervalued stocks. Backtesting results have shown so far that stocks with a favorable Value Score combined with a solid Zacks Rank are the best investment choices.

Solid prospects

The Zacks Consensus Estimate for HCA’s earnings in 2024 is $22.20 per share, representing growth of 16.8% from the prior year. The consensus estimate for revenue is $70.8 billion, representing an improvement of 8.9% from the prior year.

The consensus estimate for earnings in 2025 is $24.55 per share, representing 10.6% growth over the 2024 estimate. The consensus estimate for revenue is $74.3 billion, representing 4.9% improvement over the 2024 estimate.

Decent earnings surprise history

HCA’s bottom line beat estimates in three of the last four quarters and missed the target once; the average surprise rate was 8.24%.

Solid return on equity

HCA Healthcare’s return on equity over the last 12 months is significantly higher than the industry average, demonstrating the company’s efficiency in using shareholders’ money.

A strong perspective for 2024

HCA forecasts revenue in the range of $69.8 billion to $71.8 billion this year, with the midpoint representing 8.9% growth over the figure reported for 2023.

Earnings per share are expected to be between $21.60 and $22.80, with the midpoint representing a 17% improvement over 2023 levels.

Important tailwinds for business

HCA Healthcare’s revenue is primarily driven by increased patient volumes, which are critical to any healthcare facility operator’s revenue. The company reported a 6.4% year-over-year increase in admissions in the first half of 2024. The resumption of deferred elective procedures is expected to bring more patients to HCA’s surgery centers, potentially leading to higher inpatient occupancy rates and, in turn, higher revenues.

The increase in emergency room visits, which increased 6.5% year-over-year in the first half of 2024, is expected to further support revenue growth. HCA also operates psychiatric hospitals to address the increasing number of mental health issues in the United States. As of June 30, 2024, the company operated 188 hospitals and approximately 2,400 outpatient care facilities in 20 states and the United Kingdom.

The story continues

HCA has expanded its healthcare portfolio through strategic acquisitions over the years, expanding its capabilities and strengthening its national presence. In the first half of 2024, the company spent $131 million to acquire hospitals and healthcare facilities.

The company also offers a comprehensive suite of virtual care services that allow patients to be cared for from home, including in rural areas with limited access to healthcare. In addition, HCA is using technology to standardize care in cell therapy programs.

HCA’s strong financial position, underlined by significant cash reserves and strong cash generation capabilities, supports its business investments. The company generated operating cash flow of $4.4 billion in the first half of 2024, an increase of 3.8% over the comparable prior year period.

This financial strength also enables HCA to deliver value to shareholders through share buybacks and dividends. Management approved a 10% increase in the quarterly dividend in January 2024.

Other stocks to consider

Other top stocks in the medical sector are DaVita Inc. DVA, LeMaitre Vascular, Inc. LMAT and Universal Health Services, Inc. UHS, all of which currently have a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

DaVita’s earnings have beaten estimates in each of the trailing four quarters, with the average surprise being 24.24%. The Zacks Consensus Estimate for DVA’s earnings in 2024 suggests an improvement of 16.9% from the year-ago actual. The consensus mark for revenue suggests an increase of 5.4% from the year-ago actual. The consensus mark for DVA’s earnings has moved 2.9% higher over the past 30 days.

LeMaitre Vascular’s earnings have beaten estimates in each of the trailing four quarters, with the average surprise of 8.87%. The Zacks Consensus Estimate for LMAT’s earnings in 2024 suggests an improvement of 37% from the year-ago actual. The consensus estimate for revenues implies an improvement of 13% from the year-ago actual. The consensus mark for LMAT’s earnings has moved 4.5% higher over the past 30 days.

Universal Health’s bottom line has beaten estimates in each of the trailing four quarters, with the average surprise being 14.58%. The Zacks Consensus Estimate for UHS’s earnings in 2024 suggests a 51% improvement from the year-ago actual. The same is true for revenue, which represents a 9.8% improvement from the year-ago actual. The consensus mark for UHS’s earnings has moved 15% higher over the past 30 days.

Shares of DaVita, LeMaitre Vascular and Universal Health have gained 45.7%, 54.8% and 78.2%, respectively, over the past year.

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