HCA Healthcare’s Stock Performance Draws Attention Amid Market Challenges

HCA Healthcare, Inc. (HCA), established in 1968 and based in Nashville, Tennessee, stands out as a major player in the healthcare sector. The company boasts a market cap of $82.9 billion and operates a vast network that includes over 180 hospitals and more than 2,000 healthcare facilities throughout the United States. Providing essential services—from emergency care to surgical procedures—HCA plays a vital role in the American healthcare landscape.

As a large-cap stock, HCA’s market capitalization reflects its dominance and influence in the industry, far exceeding the $10 billion mark typical of this classification. HCA’s robust growth trajectory has positioned it strongly within a competitive market.

Yet, the company’s share prices have encountered obstacles. HCA recently reached a 52-week high of $417.14 on October 18 but has since experienced a drop of 21.6%. In the last three months, HCA stock has dipped by 16.7%, underperforming compared to the iShares U.S. Healthcare Providers ETF (IHF), which fell by just 6.1%.

In a contrasting trend, HCA recorded a 20.9% gain year-to-date (YTD), significantly outperforming IHF’s 4.1% returns. Over the past 52 weeks, HCA has increased by 31.4%, which exceeds the IHF’s 9.3% rise.

Further evidence of its recent struggles, HCA’s stock has remained below its 50-day moving average since late October and its 200-day moving average since mid-November.

After reporting Q3 earnings on October 25, HCA stock declined by 8.9%. The company achieved a revenue of $17.49 billion, meeting analyst expectations and reflecting a year-over-year increase of 7.9%. Additionally, HCA reported a non-GAAP EPS of $5.50, surpassing the consensus estimate of $4.97.

In the same quarter, adjusted EBITDA climbed to $3.26 billion, a rise from $2.88 billion in the previous year. This growth highlights HCA’s ongoing operational strength, even as the market responded negatively. Management reaffirmed its 2024 guidance, suggesting that performance might trend toward the lower end of their forecast due to impacts from hurricanes. Notably, projected capital expenditures for the year remain steady at $5 billion.

In comparison, HCA’s competitor, Universal Health Services, Inc. (UHS), has seen substantial growth, soaring 51% over the past year and achieving a YTD increase of 34.5%, outperforming HCA in both metrics.

Despite recent challenges, HCA Healthcare continues to be viewed favorably by Wall Street analysts. It has garnered a consensus “Moderate Buy” rating from 25 analysts and claims a mean price target of $409, indicating a potential upside of 25% from its current trading price.

On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.