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1. Company Snapshot

1.a. Company Description

Universal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, and outpatient and behavioral health care facilities.The company operates through Acute Care Hospital Services and Behavioral Health Care Services segments.Its hospitals offer general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic and coronary care, pediatric services, pharmacy services, and/or behavioral health services.


As of February 24, 2022, it owned and/or operated 363 inpatient facilities, and 40 outpatient and other facilities located in 39 states; Washington, D.C.; the United Kingdom; and Puerto Rico.The company also provides commercial health insurance services; and various management services, which include central purchasing, information, finance and control systems, facilities planning, physician recruitment, administrative personnel management, marketing, and public relations services.Universal Health Services, Inc.


founded in 1978 and is headquartered in King of Prussia, Pennsylvania.

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1.b. Last Insights on UHS

Universal Health Services, Inc.'s recent performance was driven by strong Q2 earnings, beating estimates with an EPS of $5.35, up 24% year-over-year. Acute care and behavioral admissions drove revenue growth. The company's financials show strong operating leverage, with 51% NOPAT growth on 23% revenue growth. An upgrade to a Zacks Rank #2 (Buy) reflects growing optimism about its earnings prospects. Additionally, the company appointed Darren Lehrich as Vice President of Investor Relations, potentially enhancing investor engagement.

1.c. Company Highlights

2. Universal Health Services Beats Earnings Expectations with Strong Revenue Growth

Universal Health Services (UHS) reported a 53% increase in adjusted net income attributable to UHS, to $5.69 per share, for the third quarter 2025, surpassing estimates of $4.66. Revenue grew 13.4% year-over-year, driven by a 12.8% increase in same-facility net revenues in the acute hospital segment and 9.3% in the behavioral health segment. The quarter included a $90 million net benefit from the District of Columbia supplemental Medicaid program, which positively impacted the company's financial performance.

Publication Date: Nov -04

📋 Highlights
  • Adjusted Net Income Surge: Rose 53% to $5.69 per share, driven by a $90 million net benefit from D.C. Medicaid supplemental payments.
  • Revenue Growth Acceleration: Year-over-year revenue increased 13.4%, with 12.8% same-facility net revenue growth in acute care and 9.3% in behavioral health.
  • EPS Guidance Raised: 2025 adjusted EPS guidance lifted 6% to $21.80/share, fueled by $140 million in increased DPP, partially offset by $53 million in malpractice/legal costs.
  • Strong Cash Flow & Buybacks: Generated $1.3 billion in operating cash flow (Jan–Sept 2025) and repurchased $566 million in shares, with a $1.5 billion stock buyback program expansion.
  • Medicaid Tailwinds & Risks: $1.3 billion net benefit from Medicaid programs in 2025, but OB3 legislation could reduce revenues by $420–470 million by 2032; pending Florida/Nevada programs may add $75–80 million if approved.

Revenue Breakdown and Margin Analysis

The acute care business saw stable performance, with volume trends and expense trends as expected. The behavioral health segment also showed improvement, with same-facility net revenues increasing 9.3%, driven by a 7.9% increase in revenue per adjusted patient day. Operating margins are expected to expand as revenue grows at a rate of 5-6% in acute care and 6-7% in behavioral health, while costs rise at around 4%. The company's focus on investing in areas where it can earn a compelling return is expected to drive growth.

Operational Updates and Future Prospects

UHS experienced progress in its acute care hospital openings, including West Henderson Hospital and Cedar Hill Regional Medical Center. The company expects to open a new hospital, the Alan B. Miller Medical Center, in Palm Beach Gardens in spring 2026. The company is also increasing staffing to capture more outpatient activity, which is driving a rise in salaries and wages. Behavioral health volume growth is targeted at 2-3% long-term, and the company is confident in its long-term target despite potential exchange volume declines.

Cash Flow and Capital Deployment

UHS generated $1.3 billion in cash from operating activities during the first 9 months of 2025 and spent $734 million on capital expenditures. The company also repurchased 3.19 million shares at a total cost of approximately $566 million and has a new $1.5 billion increase to its stock repurchase program. The company expects to continue to devote most of its free cash flow to share repurchase.

Valuation Metrics

With a P/E Ratio of 10.38, P/B Ratio of 2.0, and EV/EBITDA of 7.19, the company's valuation metrics indicate a relatively stable and profitable business. The company's return on equity (ROE) of 19.98% and return on invested capital (ROIC) of 12.34% also suggest a strong financial performance. Analysts estimate next year's revenue growth at 4.9%, which is slightly lower than the current year's growth rate.

3. NewsRoom

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UNIVERSAL HEALTH SERVICES INVESTOR ALERT: Scott+Scott Attorneys at Law LLP Investigates Universal Health Services's Directors and Officers for Breach of Fiduciary Duties – UHS

Dec -04

Source: businesswire.com

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KMT, UHS, and More Are Now Strong Buy Stocks (Dec. 3)

Dec -03

Source: zacks.com

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Best Growth Stocks to Buy for Dec.3

Dec -03

Source: zacks.com

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Best Value Stocks to Buy for Dec. 3

Dec -03

Source: zacks.com

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Charles Schwab Investment Management Inc. Has $103.28 Million Position in Universal Health Services, Inc. $UHS

Nov -29

Source: defenseworld.net

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Capital Fund Management S.A. Grows Holdings in Universal Health Services, Inc. $UHS

Nov -29

Source: defenseworld.net

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Boston Partners Has $13.86 Million Stake in Universal Health Services, Inc. $UHS

Nov -29

Source: defenseworld.net

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Best Value Stocks to Buy for Nov. 28

Nov -28

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.20%)

6. Segments

Acute Care Hospital Services

Expected Growth: 4.5%

The 4.5% growth in Acute Care Hospital Services from Universal Health Services, Inc. is driven by increasing demand for healthcare services, aging population, and expansion into new markets. Additionally, strategic acquisitions, improved operational efficiency, and enhanced patient care experiences also contribute to this growth.

Behavioral Health Services

Expected Growth: 3.8%

The 3.8% growth in Behavioral Health Services from Universal Health Services, Inc. is driven by increasing demand for mental health treatment, expanded insurance coverage, and strategic acquisitions. Additionally, the company's focus on outpatient services and telemedicine has improved accessibility, contributing to the segment's growth.

Other

Expected Growth: 3.2%

Universal Health Services, Inc.'s 3.2% growth in the 'Other' segment is driven by increasing demand for behavioral health services, expansion of outpatient care, and strategic acquisitions. Additionally, the company's focus on improving operational efficiency and cost management has contributed to the growth.

7. Detailed Products

Acute Care Hospitals

Universal Health Services, Inc. operates acute care hospitals that provide a range of medical services, including emergency care, surgery, and rehabilitation.

Behavioral Health Hospitals

UHS operates behavioral health hospitals that provide specialized care for patients with mental health and addiction issues.

Outpatient Services

UHS offers outpatient services, including urgent care centers, surgical centers, and imaging centers, that provide convenient and accessible care for patients.

Home Health Services

UHS provides home health services that allow patients to receive medical care and therapy in the comfort of their own homes.

Physician Networks

UHS has a network of physicians and medical professionals who provide primary and specialty care to patients.

8. Universal Health Services, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Universal Health Services, Inc. operates in a industry where substitutes are limited, and patients often require specialized care that cannot be easily substituted.

Bargaining Power Of Customers

While patients have some bargaining power due to the availability of multiple healthcare providers, Universal Health Services, Inc.'s strong reputation and quality of care limit the bargaining power of customers.

Bargaining Power Of Suppliers

Universal Health Services, Inc. has a diversified supplier base, and suppliers are not concentrated, which limits their bargaining power.

Threat Of New Entrants

The healthcare industry has high barriers to entry, including regulatory hurdles, high capital requirements, and the need for specialized expertise, making it difficult for new entrants to compete with Universal Health Services, Inc.

Intensity Of Rivalry

The healthcare industry is highly competitive, with many established players competing for market share, and Universal Health Services, Inc. faces intense rivalry from other healthcare providers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.42%
Debt Cost 5.64%
Equity Weight 55.58%
Equity Cost 10.42%
WACC 8.30%
Leverage 79.92%

11. Quality Control: Universal Health Services, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Encompass Health

A-Score: 5.7/10

Value: 3.8

Growth: 5.1

Quality: 7.0

Yield: 1.0

Momentum: 8.5

Volatility: 8.7

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Universal Health Services

A-Score: 5.4/10

Value: 6.8

Growth: 7.7

Quality: 6.6

Yield: 0.0

Momentum: 4.0

Volatility: 7.3

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Tenet Healthcare

A-Score: 5.2/10

Value: 6.3

Growth: 6.8

Quality: 5.5

Yield: 0.0

Momentum: 7.5

Volatility: 5.3

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Ensign Group

A-Score: 5.0/10

Value: 2.0

Growth: 7.6

Quality: 4.4

Yield: 0.0

Momentum: 7.0

Volatility: 9.0

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DaVita

A-Score: 4.8/10

Value: 8.2

Growth: 7.0

Quality: 4.8

Yield: 0.0

Momentum: 2.0

Volatility: 7.0

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Chemed

A-Score: 4.2/10

Value: 2.9

Growth: 6.1

Quality: 7.3

Yield: 0.0

Momentum: 1.0

Volatility: 7.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

231.54$

Current Price

231.54$

Potential

-0.00%

Expected Cash-Flows