Universal Health Services Inc (UHS) stock analysis

P/E below its 5-year median

Universal Health Services's P/E of 8.2 is below its own 5-year median of 11.4.

P/E below the industry

Universal Health Services's P/E of 8.2 is below the Health Services median of 23.9.

EV/EBITDA below its 5-year median

Universal Health Services's EV/EBITDA of 6.5 is below its 5-year median of 8.0.

P/B below the industry

Universal Health Services's price-to-book of 1.53 is below the Health Services median of 3.52.

Trading below fair value

The share price of $196.77 is below our fair value estimate of $333.12.

Margin of safety over 20%

The price is 40.9% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 9.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 36.2% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 6.3% over the last twelve months, against a 5-year average of 9.5% a year.

Growing faster than the industry

Revenue grew 8.0% over the last twelve months; the Health Services median is 4.0%.

Guidance lowered

Universal Health Services lowered its Year Ended December 31, 2026 Adjusted EPS – diluted outlook on Jul 28, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 19.8% over the last twelve months and averaged 15.7% over five years.

Return on capital over 10%

Return on invested capital was 12.2%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Universal Health Services's return on equity of 19.8% is above the Health Services median of 4.6%.

Earnings grew over 5 years

Net income grew 9.5% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 8.0% over the last twelve months, against a 5-year average of 6.7%.

Net margin above the industry

Universal Health Services's net margin of 8.0% is above the Health Services median of -2.6%.

High debt

Debt is 75.1% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 61.0% five years ago to 75.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 36.0% of total debt.

Interest well covered

Operating income covers interest expense 11.3 times.

Short-term assets cover short-term debts

Current assets are 1.37 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.25; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Universal Health Services paid dividends worth 0.4% of the share price over the last twelve months.

Yield below Treasuries

The 0.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Universal Health Services yields 0.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 7 fiscal years.

Covered by earnings

Dividends take 3.3% of net income.

Covered by free cash flow

Dividends take 4.4% of free cash flow.