Universal Health Services Earnings Preview

Investors are on the edge of their collective seats, hoping that Universal Health Services (NYSE: UHS  ) will top analyst expectations for the third consecutive quarter. The company will unveil its latest earnings on Monday, Feb. 27. Universal Health Services, through its subsidiaries, is engaged in the business of owning and operating acute care hospitals, behavioral health centers, surgical hospitals, ambulatory surgery centers, and radiation oncology centers.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Universal Health Services, with 14 out of 17 rating it a buy and the remainder rating it a hold. Analysts like Universal Health Services better than competitor Tenet Healthcare overall. Analysts still rate the stock a moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $1.88 billion in revenue this quarter. That would represent a rise of 20.5% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.91 per share. Estimates range from $0.89 to $0.94.

What our community says:
CAPS All-Stars are enthusiastically backing the stock, with 93.8% awarding it an outperform rating. Most of the community concurs with the All-Stars, with 92.5% granting it a rating of outperform. Despite the majority sentiment in favor of Universal Health Services, the stock has a middling CAPS rating of three out of five stars.

Management:
Universal Health Services' profit has risen year over year by an average of 32.8% over the past five quarters.

Now, a look at how efficient management has been at running the business. Traditionally, margins serve as an illustration of how efficiently a company captures portions of sales dollars. Universal Health Services' net margins, which reflect what percentage of revenue becomes profit, have been rising year over year for the last three quarters. See how Universal Health Services has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

43.3%

44.4%

44.9%

42.5%

Operating Margin

10.6%

12.2%

13.6%

8.4%

Net Margin

4.6%

5.4%

6.0%

2.4%

For all our Universal Health Services-specific analysis, including earnings and beyond, add Universal Health Services to My Watchlist.

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Earnings estimates provided by Zacks.

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