Shares of Universal Health Services (UHS) sank in after-hours trading after the healthcare management company reported earnings for its third quarter of Fiscal Year 2024. Earnings per share came in at $3.71, which missed analysts’ consensus estimate of $3.72 per share. However, sales increased by 11.2% year-over-year, with revenue hitting $3.96 billion. This beat analysts’ expectations of $3.9 billion.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Universal Health Services’ revenue was driven by solid growth at its acute care hospitals. Compared to the same time in 2023, the number of patients admitted, including outpatient visits, increased by 1.5%. Meanwhile, the total number of days patients stayed increased by 2%.
The company also saw net revenue per patient admission rise by 7% and net revenue per patient day grow by 6.5%. Overall, hospital services brought in 9.2% more revenue than in the third quarter of last year.
UHS Repurchased $154M Worth of Shares
In addition, UHS repurchased 658,000 shares for about $153.9 million (around $234 per share). On a year-to-date basis, it bought back 1.731 million shares, spending roughly $348.9 million (about $202 per share). The firm has regularly repurchased its shares in each of the most recent quarters (as demonstrated in the image below).
As a result of this commitment to buying back shares, UHS had increased its stock repurchase authorization by $1 billion in the previous quarter. With this approval, minus the money used to repurchase shares this quarter, the company’s buyback plan now has $1.074 billion remaining.
Guidance for FY 2024
Looking forward, management didn’t provide any updates to its guidance. However, during the previous quarter, the following outlook was given for FY 2024:
- Revenue of between $15.565 billion and $15.753 billion
- Adjusted EBITDA, net of NCI (noncontrolling interests) between $2.154 billion and $2.226 billion
- Adjusted EPS in the range of $15.40 to $16.20
Is UHS a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on UHS stock based on nine Buys, four Holds, and one Sell assigned in the past three months. After an 88% rally in its share price over the past year, the average UHS price target of $233.83 per share implies 2.44% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
