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2 Reasons to Like THC (and 1 Not So Much)

By: StockStory

August 01, 2025 at 00:01 AM EDT

THC Cover Image

Tenet Healthcare currently trades at $161.00 and has been a dream stock for shareholders. It’s returned 510% since August 2020, blowing past the S&P 500’s 92.2% gain. The company has also beaten the index over the past six months as its stock price is up 11.3% thanks to its solid quarterly results.

Is now still a good time to buy THC? Or are investors being too optimistic? Find out in our full research report, it’s free.

Why Does Tenet Healthcare Spark Debate?

With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE: THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services.

Two Positive Attributes:

1. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Tenet Healthcare’s EPS grew at an astounding 29.1% compounded annual growth rate over the last five years, higher than its 3.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Tenet Healthcare Trailing 12-Month EPS (Non-GAAP)

2. New Investments Bear Fruit as ROIC Jumps

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Tenet Healthcare’s ROIC has increased significantly. This is a great sign when paired with its already strong returns. It could suggest its competitive advantage or profitable growth opportunities are expanding.

Tenet Healthcare Trailing 12-Month Return On Invested Capital

One Reason to be Careful:

Same-Store Sales Falling Behind Peers

Investors interested in Hospital Chains companies should track same-store sales in addition to reported revenue. This metric measures the change in sales at brick-and-mortar locations that have existed for at least a year, giving visibility into Tenet Healthcare’s underlying demand characteristics.

Over the last two years, Tenet Healthcare’s same-store sales averaged 1.7% year-on-year growth. This performance was underwhelming and suggests it might have to change its strategy or pricing, which can disrupt operations. Tenet Healthcare Same-Store Sales Growth

Final Judgment

Tenet Healthcare’s merits more than compensate for its flaws, and with its shares topping the market in recent months, the stock trades at 12.4× forward P/E (or $161.00 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

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