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Community Health (CYH)
NYSE:CYH
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Community Health
(NYSE:CYH)52Neutral
Positive Factors
Revenue Performance
Revenue narrowly beat consensus, supported by solid volumes and pricing.
Negative Factors
Cash Flow Concerns
CFO of $67MM was above $29MM in 3Q23 but well below estimates of $209MM and $163MM.
Financial Guidance
CYH lowered the full-year revenue, adjusted EBITDA, EPS, and CFO guidance.
Community Health (CYH) vs. S&P 500 (SPY)
Market Cap
$420.94M
Dividend YieldN/A
Average Volume (3M)3.03M
Price to Earnings (P/E)―
Beta (1Y)2.29
Revenue Growth1.16%
EPS Growth-278.41%
CountryUS
Employees60,000
SectorHealthcare
Sector Strength74
IndustryHealthcare Providers & Services
Share Statistics
EPS (TTM)-3.89
Shares Outstanding138,923,220
10 Day Avg. Volume4,008,834
30 Day Avg. Volume3,033,788
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.03
Price to Cash Flow (P/CF)0.50
P/FCF Ratio1.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.13Price Target Upside36.75% Upside
Rating ConsensusHold
Number of Analyst Covering4
Community Health Business Overview & Revenue Model
Company DescriptionCommunity Health Systems, Inc. engages in the management and operations of hospitals. It operates general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services. The company was founded in March 1985 and is headquartered in Franklin, TN.
How the Company Makes MoneyCommunity Health Systems makes money primarily through patient service revenues generated from its network of hospitals and healthcare facilities. These revenues come from various sources, including government programs such as Medicare and Medicaid, private insurance companies, and direct payments from patients. The company also earns income from related healthcare services such as outpatient care, laboratory services, and specialty care provided through its facilities. Additionally, CYH may engage in strategic partnerships and joint ventures with other healthcare providers to enhance its service offerings and expand its market reach, contributing to its revenue growth.
Community Health Financial Statement Overview
Summary
Community Health exhibits a challenging financial position with ongoing losses and high leverage. While there are signs of improvement in cash flows, profitability and stability remain concerns due to declining margins and negative equity. The company needs to address its profitability issues and manage its debt levels to enhance financial health.Income Statement
The income statement reflects a mixed performance. The gross profit margin for the TTM is approximately 28.97%, showing a decline from the previous year. The net profit margin is negative at -4.08%, indicating ongoing losses, exacerbated by a significant net loss for the TTM. Revenue growth is modest at 1.16%, a slowdown compared to previous years. EBIT and EBITDA margins are also showing a declining trend, reflecting challenges in maintaining profitability.40
Negative
Balance Sheet
The balance sheet indicates financial instability with a negative stockholders' equity and a high debt-to-equity ratio, which is not calculable due to negative equity. The return on equity is also negative, and the equity ratio is not applicable. These factors highlight significant financial leverage and potential solvency risks.30
Negative
Cash Flow
The cash flow statement shows improvement in operating cash flow, with a positive free cash flow for the TTM, marking a turnaround from negative values in previous years. The free cash flow growth rate is notable, but the operating cash flow to net income ratio is high due to negative net income, indicating operational challenges.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 12.63B | 12.49B | 12.21B | 12.37B | 11.79B | Gross Profit |
| 5.27B | 5.08B | 4.91B | 5.08B | 4.42B | EBIT |
| 542.00M | 957.00M | 821.00M | 1.40B | 1.13B | EBITDA |
| 1.07B | 1.54B | 1.74B | 1.93B | 2.02B | Net Income Common Stockholders |
| -516.00M | -133.00M | 179.00M | 368.00M | 511.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 37.00M | 38.00M | 118.00M | 507.00M | 1.68B | Total Assets |
| 14.05B | 14.46B | 14.67B | 15.22B | 16.01B | Total Debt |
| 12.10B | 12.17B | 12.39B | 12.82B | 12.88B | Net Debt |
| 12.06B | 12.14B | 12.27B | 12.31B | 11.21B | Total Liabilities |
| 15.37B | 15.28B | 15.40B | 16.03B | 17.06B | Stockholders Equity |
| -1.32B | -1.39B | -1.37B | -1.37B | -1.63B |
| Cash Flow | Free Cash Flow | |||
| 120.00M | -257.00M | -124.00M | -603.00M | 1.74B | Operating Cash Flow |
| 480.00M | 210.00M | 300.00M | -131.00M | 2.18B | Investing Cash Flow |
| -275.00M | -26.00M | -259.00M | -524.00M | 177.00M | Financing Cash Flow |
| -206.00M | -264.00M | -430.00M | -514.00M | -895.00M |
Community Health Technical Analysis
Negative
3.02
Price Trends
3.24
Negative
3.73
Negative
4.13
Negative
Market Momentum
-0.04
Positive
40.24
Neutral
14.03
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CYH, the sentiment is Negative. The current price of 3.02 is below the 20-day moving average (MA) of 3.39, below the 50-day MA of 3.24, and below the 200-day MA of 4.13, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 40.24 is Neutral, neither overbought nor oversold. The STOCH value of 14.03 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CYH.
Community Health Risk Analysis
Community Health disclosed 39 risk factors in its most recent earnings report. Community Health reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Community Health Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $11.26B | 10.30 | 16.92% | 0.46% | 10.82% | 65.64% | |
72 Outperform | $9.91B | 22.08 | 22.05% | 0.64% | 11.91% | 28.47% | |
72 Outperform | $11.67B | 3.81 | 76.72% | ― | 0.57% | 440.71% | |
65 Neutral | $77.50B | 14.18 | -230.22% | 0.85% | 8.67% | 15.32% | |
61 Neutral | $2.83B | 10.97 | 8.32% | ― | 7.69% | ― | |
52 Neutral | $420.94M | ― | 39.18% | ― | 1.16% | -278.41% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
CYH
Community Health
3.02
0.23
8.24%
ACHC
Acadia Healthcare
29.68
-55.04
-64.97%
HCA
HCA Healthcare
319.63
-1.26
-0.39%
EHC
Encompass Health
100.00
23.96
31.51%
THC
Tenet Healthcare
126.02
28.68
29.46%
UHS
Universal Health
177.72
2.48
1.42%
Community Health Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -9.85% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
Community Health Systems demonstrated strong growth and financial improvements in 2024, with significant achievements in outpatient service expansion and clinical outcomes. However, challenges with payer downgrades and medical specialist fees, as well as the impact of a hurricane, present ongoing concerns.Highlights
Record Same-Store Volume Levels
Community Health Systems achieved record same-store volume levels for the full year 2024. Same-store admissions increased 3.2%, adjusted admissions increased 2.7%, and same-store surgeries increased 1.3%.
Expansion and Growth in Outpatient Services
Significant expansion in outpatient access, including the acquisition of 10 urgent care clinics in Tucson, Arizona, and the opening of two new free-standing emergency rooms. Same-store ASC cases increased 14% last year.
Financial Performance Improvements
Same-store net operating revenues increased 5.5% and adjusted EBITDA improved 6% for the year, with a 6.5% increase in same-store revenue in the fourth quarter.
Operational and Clinical Achievements
Reduction in risk-adjusted mortality rates, 90% reduction in serious safety event rate from 2013 baseline, and best retention rate for registered nurses in the past five years.
Cash Flow and Liquidity Improvements
Cash flows from operations increased significantly to $480 million for the full year 2024, up from $210 million in 2023.
Successful Divestitures
Completed divestiture of Davis Regional Medical Center and announced agreements for additional divestitures expected to generate more than $1 billion in proceeds.
Lowlights
Challenges with Payer Downgrades and Denials
Although there is some stabilization, payer downgrades and denials continue to be a troubling trend affecting revenue.
Pressure from Medical Specialist Fees
Medical specialist fees and subsidies, particularly in anesthesia services, continue to be a pressure point. Fees increased approximately $20 million or 12% year-over-year in the fourth quarter.
Impact of Hurricane on Operations
One hospital remained shut down due to hurricane impacts, contributing to a $10 million effect on financial performance in the quarter.
Company Guidance
During the Community Health Systems Fourth Quarter and Full Year 2024 Earnings Conference Call, the company reported significant growth and provided guidance for 2025. Key performance metrics included a 3.2% increase in same-store volume, a 2.7% rise in same-store adjusted admissions, and a 1.3% increase in same-store surgeries for 2024. They also noted a 14% increase in same-store ambulatory surgery center cases. Financially, same-store net operating revenues grew by 5.5%, and adjusted EBITDA improved by 6%, reaching $1.540 billion. Despite challenges such as payer downgrades and medical specialist fees, the company highlighted successful investments in outpatient access and procedural capacity. For 2025, they forecast net revenue of $12.2 billion to $12.6 billion, adjusted EBITDA of $1.450 billion to $1.6 billion, and cash flow from operations between $600 million and $700 million. They also anticipate capital expenditures of $350 million to $400 million, aiming for continued growth and strategic divestitures to enhance shareholder value.Community Health Corporate Events
M&A TransactionsFinancial Disclosures
Community Health Reports Q4 2024 Financial Results
Neutral
Feb 18, 2025
Community Health Systems, Inc. announced its financial results for the fourth quarter and the year ending December 31, 2024, reporting net operating revenues of $3.265 billion for the quarter and $12.634 billion for the year. Despite a net loss for the quarter and year attributable to stockholders, the company showed an increase in adjusted EBITDA due to higher same-store volumes, increased reimbursement rates, and favorable payor mix. The year also saw the completion of two hospital divestitures, impacting the operational and financial landscape.
Executive/Board Changes
Community Health Approves 2025 Executive Compensation Plan
Neutral
Feb 14, 2025
On February 12, 2025, Community Health Systems’ Board of Directors approved the 2025 compensation arrangements for its executive officers, excluding the recently retired Dr. Lynn T. Simon. The compensation package includes base salaries, cash incentives linked to performance goals, and long-term equity awards. The equity awards include non-qualified stock options and restricted stock, vesting over three years. These changes reflect the company’s strategy to align executive compensation with performance objectives and shareholder value.
Executive/Board ChangesBusiness Operations and Strategy
Community Health Engages Retiring Officer for Consultancy Role
Positive
Dec 31, 2024
Community Health Systems, Inc. has entered into a consultancy agreement with its retiring President, Healthcare Innovation and Chief Medical Officer, Dr. Lynn T. Simon. The agreement, effective from January 1, 2025, to December 31, 2027, allows Dr. Simon to advise the company on healthcare innovation and strategy, while receiving a monthly consulting fee and maintaining certain stock options. This move is expected to bolster the company’s innovation strategy while retaining Dr. Simon’s expertise.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.