# Tenet Healthcare (THC.US)

Canonical: https://gigainvestors.com/s/THC

Analysis as of: 2026-10-16T07:32:22.399Z. Financial observations: FY1996–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $275.13 per share; close as of 2026-10-15.

Estimated value: low $170.21 per share, central $191.92 per share, high $220.81 per share. Buy at or below the central value $191.92 per share. Valuation as of 2026-10-16T07:32:22.399Z; scenarios are not confidence intervals.

Expected annual return: 7.7% at the stated quote. About 7.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 4 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 2

- Operating margin variation: 0.45×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.06×

- FY2018: 0.09×

- FY2019: 0.08×

- FY2020: 0.11×

- FY2021: 0.15×

- FY2022: 0.12×

- FY2023: 0.12×

- FY2024: 0.29×

- FY2025: 0.16×

- LTM to Jun 2026: 0.17×

### moat: pass

- ROIC, median of available years: 36.6%

- ROIC, second-lowest year: 12.3%

- Typical minus recent gross margin: -3.1 pp

- Typical gross margin (annual median): 36.6%

- Recent gross margin (lower of latest and 3-year median): 39.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.7%

- ROIC including acquisitions, ten-year median: 3.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 12.1%

- FY2017: 12.3%

- FY2018: 16.9%

- FY2019: 14.6%

- FY2020: 44.3%

- FY2021: 44.5%

- FY2022: 33.1%

- FY2023: 40.1%

- FY2024: 96.3%

- FY2025: 87.8%

### economics: pass

- Owner earnings / net income, 5-yr: 1.03×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $6.8B

- Net income, five-year total: $6.5B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.4 pp

- Working capital / revenue, change between three-year averages: -2.7 pp

- Working capital / revenue, final three-year average: 9.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.13×

- FY2022: 1.08×

- FY2023: 1.19×

- FY2024: 0.98×

- FY2025: 1.00×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 12.3% vs 87.8%

- Per-share earnings: -1.93 to 15.49 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.9%

- Ordinary dilution, 5-year annual growth: -3.1%

- Market cap gain: $17B

- Cumulative retained earnings: $6.2B

- Diluted shares, 10-year annual growth: -0.9%

- Diluted shares, 5-year annual growth: -3.1%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: $17.42

- Per-share value, starting three-year median: -$1.93

- Per-share value, ending three-year median: $15.49

- Buybacks concentrated in cheaper years (correlation): -0.05

- Average buyback yield: 8.2%

- Buyback history: 8 years

- Debt-funded buybacks: No

- Acquisition spending: $4.0B

- Cumulative net income, 10 years: $5.9B

- ROIC, first three-year median: 12.3%

- ROIC, last three-year median: 87.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$1.93

- FY2017: -$7.00

- FY2018: $1.00

- FY2019: -$2.08

- FY2020: $3.75

- FY2021: $8.42

- FY2022: $3.72

- FY2023: $5.83

- FY2024: $32.69

- FY2025: $15.49

### accounting: pass

- Sloan accruals: -7.2%

- Receivables to sales index (DSRI): 0.81×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 2.9%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.52×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 2.97×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.0%

- FY2017: -8.1%

- FY2018: -4.2%

- FY2019: -6.2%

- FY2020: -11.1%

- FY2021: -2.4%

- FY2022: -2.5%

- FY2023: -6.2%

- FY2024: 4.0%

- FY2025: -7.2%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 5.7% a year for ten years · "Tenet Reports Strong Second Quarter 2026 Results; Raises 2026 Financial Outlook" (finance.yahoo.com, Jul 2026) · sales +2.4%

Story as of 2026-10-16T09:59:41.442Z; price observation 2026-10-15.

Price needs cash profits to grow 5.7% a year for ten years

- 2025-04-30: Tenet Beats Q1 Earnings on Strong Ambulatory Unit, Ups '25 EPS View ([finance.yahoo.com](https://finance.yahoo.com/news/tenet-beats-q1-earnings-strong-165700673.html))

- 2025-05-13: THC Q1 Earnings Call: Outpatient Momentum and Cost Controls Drive Outperformance ([finance.yahoo.com](https://finance.yahoo.com/news/thc-q1-earnings-call-outpatient-101802156.html))

- 2025-11-12: Tenet Healthcare (THC): Valuation in Focus After Debt Refinancing Spurs Fitch Ratings Upgrade ([finance.yahoo.com](https://finance.yahoo.com/news/tenet-healthcare-thc-valuation-focus-031442127.html))

- 2026-02-11: Tenet Reports Strong Fourth Quarter and FY 2025 Results; Provides 2026 Financial Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/tenet-reports-strong-fourth-quarter-114500356.html))

- 2026-07-23: Tenet Reports Strong Second Quarter 2026 Results; Raises 2026 Financial Outlook ([finance.yahoo.com](https://finance.yahoo.com/healthcare/articles/tenet-reports-strong-second-quarter-200500943.html))

- 2026-08-23: Tenet Healthcare (THC) Stock May Be 49% Undervalued After Raised Outlook ([finance.yahoo.com](https://finance.yahoo.com/healthcare/articles/tenet-healthcare-thc-stock-may-140728350.html))

### Sales · FY2025–2026

sales +2.4%; source https://www.sec.gov/Archives/edgar/data/70318/000007031826000012/thc-20251231.htm; observed 2026-02-17.

- FY2017: $19B 

- FY2018: $18B 

- FY2019: $18B 

- FY2020: $18B 

- FY2021: $19B 

- FY2022: $19B 

- FY2023: $21B 

- FY2024: $21B 

- FY2025: $21B 

- FY2026: $22B 

### Gross margin · FY2025

gross margin 82.3%; source https://www.sec.gov/Archives/edgar/data/70318/000007031826000012/thc-20251231.htm; observed 2026-02-17.

- FY2016: 36.4% 

- FY2017: 35.4% 

- FY2018: 36.4% 

- FY2019: 36.3% 

- FY2020: 35.3% 

- FY2021: 37.3% 

- FY2022: 36.8% 

- FY2023: 38.0% 

- FY2024: 39.7% 

- FY2025: 82.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in medical care facilities; annual sales are USD 21.3 billion.

- Source: https://www.sec.gov/Archives/edgar/data/70318/000007031826000012/thc-20251231.htm (filed 2026-02-17); FY2025: revenue 21310000000; grossProfit 17530000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); THC.US: Tenet Healthcare Corporation operates as a diversified healthcare services company in the United States. The company operates through two segments: Hospital Operations and Services, and Ambulatory Care. Its general hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies. The company also provides intensive and critical care, and/or coronary care units; cardiovascular, digestive disease, neurosciences, musculoskeletal, and obstetrics services; outpatient services, including physical therapy; tertiary care services, such as cardiothoracic surgery, complex spinal surgery, neonatal intensive care, and neurosurgery services; pediatric quaternary care services through heart, liver, and kidney transplants programs; and limb salvaging vascular procedure, acute level 1 trauma, intravascular stroke care, minimally invasive cardiac valve replacement, imaging technology, surgical robotic, and telemedicine access services. In addition, it offers a range of procedures and services comprising orthopedics, total joint replacement, and spinal and other musculoskeletal procedures; gastroenterology; pain management; otolaryngology; ophthalmology; and urology. Further, the company operates acute care and specialty hospitals, off-campus emergency departments, imaging centers, urgent care centers, and micro-hospitals, as well as ambulatory surgery centers and surgical hospitals. Tenet Healthcare Corporation was founded in 1967 and is headquartered in Dallas, Texas.

### Why customers stay

Margins ranged from 38% to 82.3% during 2023–25; it earns 36.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: grossProfit / revenue = 38%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: grossProfit / revenue = 39.7%.

- Source: https://www.sec.gov/Archives/edgar/data/70318/000007031826000012/thc-20251231.htm (filed 2026-02-17); FY2025: grossProfit / revenue = 82.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); 10-year return on capital observations [[2016,0.1208483429780563],[2017,0.12278592375366569],[2018,0.16917461673656384],[2019,0.1464882697947214],[2020,0.44268862675272647],[2021,0.4448425556663344],[2022,0.3313563097704248],[2023,0.4009870495444035],[2024,0.963297471320578],[2025,0.8783030858869229]]; median 0.36617167965741415. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 37% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/70318/000007031826000012/thc-20251231.htm (filed 2026-02-17); Gross margin observations: [[2021,0.37300487554529127],[2022,0.36758109940544487],[2023,0.3798423204204789]]; range within 2 percentage points.

### Where the cash goes

Reinvests 32.3% of cash earnings; paid dividends in 7 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2018: growth capex 0; upkeep 617000000; cash acquisitions 113000000; owner earnings 145555075.59395248. Growth capex plus acquisitions / owner earnings = 0.7763384377967711.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2020: growth capex 0; upkeep 540000000; cash acquisitions 1177000000; owner earnings 563691406.25. Growth capex plus acquisitions / owner earnings = 2.08802189806313.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2021: growth capex 0; upkeep 658000000; cash acquisitions 1220000000; owner earnings 1035907921.4624238. Growth capex plus acquisitions / owner earnings = 1.1777108512479446.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2022: growth capex 0; upkeep 762000000; cash acquisitions 234000000; owner earnings 443469000. Growth capex plus acquisitions / owner earnings = 0.5276580775657373.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: growth capex 0; upkeep 751000000; cash acquisitions 224000000; owner earnings 730000000. Growth capex plus acquisitions / owner earnings = 0.30684931506849317.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: growth capex 44830340.24005675; upkeep 886169659.7599432; cash acquisitions 571000000; owner earnings 3146323102.5512257. Growth capex plus acquisitions / owner earnings = 0.1957301650744976.

- Source: https://www.sec.gov/Archives/edgar/data/70318/000007031826000012/thc-20251231.htm (filed 2026-02-17); FY2025: growth capex 147000000; upkeep 863000000; cash acquisitions 308000000; owner earnings 1407000000. Growth capex plus acquisitions / owner earnings = 0.32338308457711445.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Dividend observations: [[2016,218000000],[2017,987000000],[2018,288000000],[2019,307000000],[2020,287000000],[2021,423000000],[2022,560000000],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/70318/000007031826000012/thc-20251231.htm (filed 2026-02-17); FY2025: cash repurchases 1437000000 USD.

### Are managers owners

Insiders own 1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); THC.US SharesStats.PercentInsiders = 0.9690000000000001 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 5.7% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Ten-year compound average after fade. Initial solved rate 0.06839106201595635. Price 275.13; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -1.4117599604707212 → FY2025 15.48996510078936. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $19.71 per share

- 2016-11: $15.23 per share

- 2016-12: $14.84 per share

- 2017-01: $17.59 per share

- 2017-02: $19.30 per share

- 2017-03: $17.71 per share

- 2017-04: $15.67 per share

- 2017-05: $16.54 per share

- 2017-06: $19.34 per share

- 2017-07: $17.35 per share

- 2017-08: $17.17 per share

- 2017-09: $16.43 per share

- 2017-10: $14.28 per share

- 2017-11: $14.10 per share

- 2017-12: $15.16 per share

- 2018-01: $18.88 per share

- 2018-02: $20.60 per share

- 2018-03: $24.25 per share

- 2018-04: $23.94 per share

- 2018-05: $35.43 per share

- 2018-06: $33.57 per share

- 2018-07: $37.63 per share

- 2018-08: $33.72 per share

- 2018-09: $28.46 per share

- 2018-10: $25.73 per share

- 2018-11: $26.07 per share

- 2018-12: $17.14 per share

- 2019-01: $21.99 per share

- 2019-02: $28.58 per share

- 2019-03: $28.84 per share

- 2019-04: $21.90 per share

- 2019-05: $19.96 per share

- 2019-06: $20.66 per share

- 2019-07: $23.57 per share

- 2019-08: $21.65 per share

- 2019-09: $22.12 per share

- 2019-10: $25.34 per share

- 2019-11: $32.20 per share

- 2019-12: $38.03 per share

- 2020-01: $31.64 per share

- 2020-02: $26.28 per share

- 2020-03: $14.40 per share

- 2020-04: $20.18 per share

- 2020-05: $21.76 per share

- 2020-06: $18.11 per share

- 2020-07: $26.44 per share

- 2020-08: $28.18 per share

- 2020-09: $24.51 per share

- 2020-10: $24.54 per share

- 2020-11: $31.43 per share

- 2020-12: $39.93 per share

- 2021-01: $47.27 per share

- 2021-02: $51.02 per share

- 2021-03: $52.00 per share

- 2021-04: $59.26 per share

- 2021-05: $66.91 per share

- 2021-06: $66.99 per share

- 2021-07: $71.84 per share

- 2021-08: $75.35 per share

- 2021-09: $66.44 per share

- 2021-10: $71.66 per share

- 2021-11: $72.87 per share

- 2021-12: $81.69 per share

- 2022-01: $74.12 per share

- 2022-02: $85.99 per share

- 2022-03: $85.96 per share

- 2022-04: $72.51 per share

- 2022-05: $64.71 per share

- 2022-06: $52.56 per share

- 2022-07: $66.12 per share

- 2022-08: $56.50 per share

- 2022-09: $51.58 per share

- 2022-10: $44.36 per share

- 2022-11: $46.18 per share

- 2022-12: $48.79 per share

- 2023-01: $54.85 per share

- 2023-02: $58.53 per share

- 2023-03: $59.42 per share

- 2023-04: $73.32 per share

- 2023-05: $71.20 per share

- 2023-06: $81.38 per share

- 2023-07: $74.73 per share

- 2023-08: $77.56 per share

- 2023-09: $65.89 per share

- 2023-10: $53.70 per share

- 2023-11: $69.01 per share

- 2023-12: $75.57 per share

- 2024-01: $82.74 per share

- 2024-02: $93.00 per share

- 2024-03: $105.11 per share

- 2024-04: $112.29 per share

- 2024-05: $135.22 per share

- 2024-06: $133.03 per share

- 2024-07: $149.70 per share

- 2024-08: $165.84 per share

- 2024-09: $166.20 per share

- 2024-10: $155.02 per share

- 2024-11: $142.68 per share

- 2024-12: $126.23 per share

- 2025-01: $140.89 per share

- 2025-02: $126.59 per share

- 2025-03: $134.50 per share

- 2025-04: $142.95 per share

- 2025-05: $168.77 per share

- 2025-06: $176.00 per share

- 2025-07: $161.28 per share

- 2025-08: $184.33 per share

- 2025-09: $203.04 per share

- 2025-10: $206.49 per share

- 2025-11: $216.84 per share

- 2025-12: $198.72 per share

- 2026-01: $189.28 per share

- 2026-02: $239.39 per share

- 2026-03: $188.71 per share

- 2026-04: $177.12 per share

- 2026-05: $175.32 per share

- 2026-06: $187.08 per share

- 2026-07: $254.78 per share

- 2026-08: $265.91 per share

- 2026-09: $255.56 per share

- 2026-10: $275.13 per share

## Annual estimated value (USD per share)

- FY2021: low $30.15 per share, central $37.54 per share, high $42.09 per share

- FY2022: low $52.66 per share, central $69.43 per share, high $80.98 per share

- FY2023: low $79.09 per share, central $100.87 per share, high $117.51 per share

- FY2024: low $102.94 per share, central $114.25 per share, high $129.29 per share

- FY2025: low $152.41 per share, central $171.20 per share, high $196.23 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/70318/000007031826000012/thc-20251231.htm); period 2025-12-31, filed 2026-02-17.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.