Tenet Healthcare’s fourth quarter results were well received by the market, reflecting strong operational execution and higher-than-expected profitability. Management attributed the quarter’s outperformance to robust growth in its ambulatory surgical center (USPI) business, disciplined expense management, and favorable payer mix. CEO Saumya Sutaria emphasized that “high acuity and disciplined cost control” were key factors, while CFO Sun Park highlighted margin improvements driven by lower labor costs and increased net revenue per admission. The company also benefited from recent investments in technology and capital improvements, which helped maintain stable operating margins despite flat same-store sales.
Is now the time to buy THC? Find out in our full research report (it’s free for active Edge members).
Tenet Healthcare (THC) Q4 CY2025 Highlights:
- Revenue: $5.53 billion vs analyst estimates of $5.47 billion (9% year-on-year growth, 1.1% beat)
- Adjusted EPS: $4.70 vs analyst estimates of $4.07 (15.6% beat)
- Adjusted EBITDA: $1.18 billion vs analyst estimates of $1.16 billion (21.4% margin, 2.2% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $17.33 at the midpoint, beating analyst estimates by 5.5%
- EBITDA guidance for the upcoming financial year 2026 is $4.64 billion at the midpoint, in line with analyst expectations
- Operating Margin: 15.4%, in line with the same quarter last year
- Same-Store Sales were flat year on year (3.1% in the same quarter last year)
- Market Capitalization: $20.59 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Tenet Healthcare’s Q4 Earnings Call
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Stephen Baxter (Wells Fargo) asked about the flat hospital volumes and expectations for improvement in 2026. CFO Sun Park cited weaker than usual respiratory season but anticipates returns from recent growth capital investments to drive gradual improvement.
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Whit Mayo (Leerink Partners) pressed for details on structural expense management. CEO Saumya Sutaria explained that automation, technology deployment, and modernized processes—such as length-of-stay management—are designed for sustainable savings beyond traditional annual cost-cutting.
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Ben Hendrix (RBC Capital Markets) questioned the hospital admission growth guide and the impact of exchange expirations versus core operation trends. Park clarified that the outlook assumes a 20% drop in exchange enrollment, with volume momentum expected from recent capital and technology investments.
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Matthew Gillmor (KeyBanc Capital Markets) followed up on cost initiatives and timing. Park said savings are embedded in 2026 guidance, with efforts intended to benefit future years as well.
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Kevin Fischbeck (Bank of America) asked if the current pace of margin improvement is sustainable. Sutaria responded that while guidance is attractive, continued progress will require significant work and creativity given sector headwinds.
Catalysts in Upcoming Quarters
In the coming quarters, StockStory analysts will monitor (1) the pace and impact of automation and technology-driven cost savings on margins, (2) the ability of USPI to maintain double-digit growth in high-acuity ambulatory procedures through continued M&A and service line expansion, and (3) enrollment trends and payer mix shifts as the enhanced exchange tax credits expire. Progress on Conifer’s transformation and execution of structural expense management will also be key areas of focus.
Tenet Healthcare currently trades at $234.21, up from $193.04 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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