Tenet Healthcare’s third quarter results were met with a negative market reaction, despite the company delivering revenue and non-GAAP profit above Wall Street’s expectations. Management highlighted strong performance in both ambulatory surgical centers and hospitals, citing increased same-store growth, high patient acuity, and effective cost controls as key contributors. CEO Saum Sutaria specifically pointed to robust M&A activity and the addition of new facilities, as well as continued improvements in cash collections and operational efficiency. However, investors appeared cautious, reflecting ongoing concerns around operating margins and sector-specific headwinds.
Is now the time to buy THC? Find out in our full research report (it’s free for active Edge members).
Tenet Healthcare (THC) Q3 CY2025 Highlights:
- Revenue: $5.29 billion vs analyst estimates of $5.26 billion (3.3% year-on-year growth, 0.6% beat)
- EPS (GAAP): $3.86 vs analyst estimates of $3.03 (27.5% beat)
- Adjusted EBITDA: $1.10 billion vs analyst estimates of $1.03 billion (20.8% margin, 6.9% beat)
- The company slightly lifted its revenue guidance for the full year to $21.25 billion at the midpoint from $21.1 billion
- EPS (GAAP) guidance for the full year is $15.02 at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for the full year is $4.52 billion at the midpoint, above analyst estimates of $4.46 billion
- Operating Margin: 16.8%, down from 21.3% in the same quarter last year
- Same-Store Sales rose 1.4% year on year (2.7% in the same quarter last year)
- Market Capitalization: $17.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Tenet Healthcare’s Q3 Earnings Call
- Kevin Fischbeck (Bank of America) pressed for details on utilization assumptions in Q4 guidance and USPI’s capacity. CEO Saum Sutaria clarified that no surge in demand is expected from subsidy changes and USPI is prepared for typical seasonal volume increases.
- Scott Fidel (Goldman Sachs) asked about the increase in capital expenditures and specific investment areas. Sutaria explained that new spending is targeted at expanding clinical program infrastructure and high-acuity service lines within hospitals.
- Craig Hettenbach (Morgan Stanley) inquired about sustainability of free cash flow trends. CFO Sun Park noted ongoing improvements in cash collections and working capital, emphasizing efforts to make these gains durable.
- Ann Hynes (Mizuho) questioned whether the favorable labor cost environment would persist into 2026. Park responded that labor expenses have been manageable and no major changes are anticipated, but flagged tariffs as an area requiring continued vigilance.
- Joshua Raskin (Nephron Research) asked about the ASC acquisition landscape and physician sentiment. Sutaria stated that Tenet’s track record and multi-specialty capabilities continue to attract physician partners, with no major shifts in competitive dynamics noted.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory analyst team will focus on (1) tracking the pace of new ambulatory center openings and integration of acquired facilities, (2) monitoring the impact of increased hospital capital investments on patient volumes and service mix, and (3) assessing the sustainability of margin improvements amid labor and supply chain pressures. Regulatory developments affecting reimbursement, including potential changes to premium subsidies and state payment programs, will also be key areas of attention.
Tenet Healthcare currently trades at $201.39, down from $216.02 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
Our Favorite Stocks Right Now
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
