Universal Health Services (UHS) Up 11.4% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Universal Health Services (UHS). Shares have added about 11.4% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Universal Health Services due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.Universal Health Q2 Earnings Beat on Strong Acute Care AdmissionsUniversal Health reported second-quarter 2025 adjusted earnings per share (EPS) of $5.35, which beat the Zacks Consensus Estimate by 10.3%. The bottom line climbed 24.1% year over year.Net revenues advanced 9.6% year over year to nearly $4.3 billion. The top line surpassed the consensus mark by 1.5%.UHS’ strong quarterly results benefited from continued growth in admissions at its acute care facilities and behavioral health care services, resulting in substantial contributions from the segments. However, the upside was partly offset by higher expenses.UHS’ Quarterly Operational UpdateAdjusted EBITDA, net of NCI, was $642.9 million, which improved nearly 11.1% year over year and surpassed our estimate of $602.8 million.Total operating costs escalated 9% year over year to $3.8 billion due to higher salaries, wages and benefits, supplies and other operating expenses.UHS’ Segmental UpdateAcute Care Hospital ServicesAdjusted admissions (adjusted for outpatient activity) rose 2% on a same-facility basis. Adjusted patient days grew 1.1% year over year. Net revenues stemming from Universal Health’s acute care services advanced 7.9% on a same-facility basis.Behavioral Health Care ServicesAdjusted admissions increased 0.4% on a same-facility basis in the quarter. Adjusted patient days rose 1.2% on a same-facility basis. Net revenues derived from UHS’ behavioral healthcare services increased 8.9% on a same-facility basis.Financial Update of UHS (As of June 30, 2025)Universal Health exited the second quarter with cash and cash equivalents of $137.6 million, which rose from the 2024-end level figure of $126 million. As part of its $1.3 billion revolving credit facility, net of outstanding borrowings and letters of credit, there remains an aggregate available borrowing capacity of $1.08 billion at the second-quarter end.Total assets of $15 billion increased from $14.5 billion at 2024-end.Long-term debt amounted to $4.5 billion, which increased 1.7% from the 2024-end level. Current maturities of long-term debt totaled $40.9 million.Total equity of $7.1 billion rose from the 2024-end figure of $6.7 billion.UHS generated cash flows from operations of $549 million in the second quarter of 2025, which declined 19.2% from the year-ago period.UHS’ Share Repurchase UpdateUniversal Health bought back shares worth $150.8 million in the second quarter. The company had a leftover repurchase capacity of around $492.9 million as of June 30, 2025.2025 Guidance of Universal HealthManagement now expects 2025 net revenues to be between $17.096 billion and $17.312 billion, higher than the earlier expected range of $17.020-$17.364 billion.Adjusted EBITDA, net of NCI, is now anticipated to be in the range of $2.458-$2.543 billion, higher than the earlier estimated range of $2.357-$2.484 billion. EPS is now expected in the band of $20-$21, higher than the earlier estimated range of $18.45-$19.95.Depreciation and amortization expenses are now anticipated to be $622.68 million. Interest expenses are now estimated at around $147.16 million. Provision for income taxes are now expected to be in the range of $407.80-$428.24 million, compared to the earlier expected range of $376.81-$407.31 million.Capital expenditures were earlier expected to be between $850 million and $1 billion.How Have Estimates Been Moving Since Then?It turns out, estimates revision have trended upward during the past month.VGM ScoresAt this time, Universal Health Services has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Universal Health Services has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerUniversal Health Services is part of the Zacks Medical - Hospital industry. Over the past month, Tenet Healthcare (THC), a stock from the same industry, has gained 15.4%. The company reported its results for the quarter ended June 2025 more than a month ago.Tenet reported revenues of $5.27 billion in the last reported quarter, representing a year-over-year change of +3.3%. EPS of $4.02 for the same period compares with $2.31 a year ago.For the current quarter, Tenet is expected to post earnings of $3.35 per share, indicating a change of +14.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +6.1% over the last 30 days.Tenet has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>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 Universal Health Services, Inc. (UHS): Free Stock Analysis Report Tenet Healthcare Corporation (THC): 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