Attractive Price-to-Earnings Ratio
Low Price-to-Sales Ratio
Strong Gross Profit Margin
Decent Net Profit Margin
Strong Interest Coverage
Free Cash Flow Per Share
🏥 Strong Operational Performance
💰 Robust Financial Health
🌍 Expanding Network and Market Share
📈 Strategic Growth Guidance
🛠️ Investment in Technology and Workforce
Negative Price-to-Book Ratio
Negative Return on Equity
High Debt Levels
Low Current and Quick Ratios
🌪️ Hurricane Impact
📉 Adjusted EBITDA Margin Decline
📉 Medicaid Program Uncertainty
⚠️ Market Challenges
Overall, HCA Healthcare exhibits strong operational quality and financial health, with expanding market presence and a strategic focus on future growth. However, challenges such as the impact of natural disasters and uncertainty in Medicaid revenues could affect their performance in the near term.
Analysis Date: January 24, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$868.23
Current Market Price: $319.69
IV/P Ratio: 2.72x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
63.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for HCA
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (14.71)
P/B ratio ≤ 1.5 (-33.90)
Current ratio ≥ 2.0 (1.08x)
Long-term debt < Net current assets (32.49x)
Margin of safety (63.0%)
HCA does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
HCA's gross profit margin of 50.44% indicates effective management of production costs and strong pricing power.
The net profit margin of 8.16% suggests that HCA is able to convert a respectable portion of revenue into profit.
The return on equity of -2.92% is a significant concern, indicating that the company is currently not generating value for shareholders.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
-291.79%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
2.42%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
50.44%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
8.16%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
An interest coverage ratio of 7.41 indicates that HCA is capable of covering its interest obligations comfortably.
The free cash flow per share of 22.08 suggests that HCA has ample cash flow to support operations and potential dividends.
The debt-to-assets ratio of 76.01% indicates that HCA is heavily leveraged, which can pose risks in downturns.
With a current ratio of 1.08 and quick ratio of 0.97, HCA may face liquidity challenges, especially in unforeseen circumstances.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
81.51x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.08x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
HCA Healthcare demonstrated strong operational fundamentals with consistent growth across key performance indicators. Inpatient admissions grew by 3%, and revenue growth was approximately 6%. This indicates a solid demand for healthcare services across most service categories.
The company reported a significant increase in adjusted EBITDA by 9% over the prior year, reflecting strong cash flow and a stable balance sheet which positions them well for future investments and shareholder value.
HCA is actively expanding its healthcare network, having added more facilities compared to the previous year, which supports their market position and ability to provide comprehensive care.
The company faced adverse financial impacts from hurricanes, estimated at approximately $0.60 per share in Q4 2024, which affected overall performance.
The adjusted EBITDA margin saw a decline of 60 basis points, primarily due to hurricane-related expenses, indicating vulnerability to external disruptions.
For 2025, HCA provided positive guidance, expecting revenue to range between $72.8 billion and $75.8 billion, indicating confidence in future growth amidst challenges.
HCA is focusing on investing in technology, including AI capabilities, and enhancing workforce development to improve operational efficiency and patient outcomes.
The company faces uncertainty regarding Medicaid supplemental payment programs, which could present a headwind in 2025, indicating potential revenue risks.
HCA anticipates a decline in growth rates for healthcare exchanges in 2025 compared to 2024, suggesting a more challenging environment for sustaining high growth.