Is it Time to Hold on to Community Health Systems Stock?

Community Health Systems, Inc. CYH remains a stock worth holding, backed by growing occupancy, revenue per admission and business streamlining efforts. With the aging U.S. population fueling demand for healthcare services, the Franklin, TN-based operator of general acute care hospitals and outpatient facilities is positioned for steady growth. The company currently carries a market cap of $392.3 million.Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.Growth DriversCommunity Health continues to focus on investing in high-return markets, which should help capture rising healthcare demand. Occupancy rates have steadily improved, reaching 52.5% in 2024 and averaging 53.4% in the first half of 2025. We expect this to climb to 54.8% by year-end.Revenue per adjusted admission is trending higher, helping offset softer admissions volumes. To streamline operations, CYH has been actively divesting non-core assets, including the $260 million sale of Florida hospitals to AdventHealth in early 2025. The company is also pursuing the sale of a three-hospital portfolio in Pennsylvania after an earlier deal collapsed.The company’s cash flow situation is expected to strengthen this year. Net operating cash flow is forecasted within $600-$700 million for 2025, up from $480 million last year, reflecting growing strength in operations.Zacks Estimates for CYHAnalysts see a sharp rebound ahead. The Zacks Consensus Estimate calls for a 67% earnings improvement in 2025 from last year’s loss of 34 cents per share, followed by another 45.6% gain in 2026. Revenue estimates stand at $12.4 billion for 2025 and $12.7 billion for 2026.Still, the stock has slipped 6.4% year-to-date, compared with a 27.6% rally in the broader industry. On valuation, CYH trades at a forward 12-month price-to-sales ratio of just 0.03X, far below the industry average of 0.83X. CYH carries a Value Score of A.Community Health Systems, Inc. Price and Consensus Community Health Systems, Inc. price-consensus-chart | Community Health Systems, Inc. QuoteKey ConcernsThere are a few factors that investors should keep an eye on.Balance sheet weakness can affect Community Health's financial flexibility. It exited the second quarter with cash and cash equivalents of $456 million, while long-term debt amounted to $10.8 billion. Its net debt-to-EBITDA of 8.3% is higher than the industry average of 3.3%. Profitability also lags, with return on invested capital at 6.5% versus the industry’s 13.4%. Nevertheless, we believe that a systematic and strategic plan of action will drive long-term growth.Better-Ranked PlayersSome better-ranked stocks in the Medical space include Tenet Healthcare Corporation THC and Encompass Health Corporation EHC. While Tenet Healthcare sports a Zacks Rank #1 (Strong Buy) at present, Encompass Health carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Tenet Healthcare’s 2025 full-year earnings indicates a 30.8% year-over-year increase. It beat earnings estimates in each of the past four quarters, with an average surprise of 31.2%. Also, the consensus mark for Tenet Healthcare’s 2025 full-year revenues suggests 2.4% year-over-year growth.The consensus mark for Encompass Health’s 2025 full-year earnings indicates 18.3% year-over-year growth. The earnings estimate has witnessed seven upward estimate revisions in the past month, against no movement in the opposite direction. Furthermore, the consensus estimate for Encompass Health’s 2025 full-year revenues suggests 10.2% year-over-year growth.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tenet Healthcare Corporation (THC): Free Stock Analysis Report Community Health Systems, Inc. (CYH): Free Stock Analysis Report Encompass Health Corporation (EHC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks