Universal Health Services, Inc. (UHS) Fundamental Analysis: Bull vs. Bear Case

UHS

Universal Health Services, Inc.

Fundamental data last updated:October 12, 2026

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company profile

SECTOR

Healthcare

industry

Medical - Care Facilities

Exchange

NYSE

County of HQ

US

Next Earnings Date

Pending Announcement

Business Summary

Universal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, and outpatient and behavioral health care facilities. The company operates through Acute Care Hospital Services and Behavioral Health Care Services segments. Its hospitals offer general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic and coronary care, pediatric services, pharmacy services, and/or behavioral health services. As of February 24, 2022, it owned and/or operated 363 inpatient facilities, and 40 outpatient and other facilities located in 39 states; Washington, D.C.; the United Kingdom; and Puerto Rico. The company also provides commercial health insurance services; and various management services, which include central purchasing, information, finance and control systems, facilities planning, physician recruitment, administrative personnel management, marketing, and public relations services. Universal Health Services, Inc. founded in 1978 and is headquartered in King of Prussia, Pennsylvania.

VALUATION

P/E

6.02 Market Cap ($M USD)

$9.39B

Forward P/E

4.99 PEG

0.24 PRICE TO SALES

0.53 PRICE TO BOOK

1.22 EV / EBITDA

5.15 5-Year Average P/E

Free Cash Flow Yield

9.53%

DCF Value

$360.03

Graham Number

$262.88

Price to FCF

10.50 EV to FCF

16.10 Earnings Yield

16.61%

FCF Yield

9.53%

DIVIDEND

Yield

0.53%

Annual Payout

$0.80

Payout Ratio

3.33%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$24.90

Next Year EPS Growth Estimate

$30.02

Next Year Revenue Growth Estimate

$20.98B

Return on Equity (ROE)

20.93%

FREE CASH FLOW

Operating Margin

11.50%

Debt-to-Equity

0.76 Piotroski F-Score

7 Altman Z-Score

2.30 Return on Invested Capital (ROIC)

16.42%

Current Ratio

1.08 Quick Ratio

1.08 Net Debt to EBITDA

1.79 Interest Coverage

13.39 Gross Profit margin

71.32%

FCF PER SHARE

$14.64

REVENUE PER SHARE

$290.84

Gainseekers Quantitative Analysis

Summary

The market appears to be significantly undervaluing Universal Health Services, Inc. relative to its intrinsic worth. With a DCF value nearly double the recent pricing, the stock seems poised for a re-rating. The Forward P/E of 5.66 and an impressive Earnings Yield of 14.65% suggest robust earnings potential, while the Altman Z-score of 2.40 indicates moderate financial stability. Despite these strengths, the market’s cautious “Hold” consensus may reflect broader sector concerns rather than company-specific weaknesses.

AI Exposure / Tech Reliance

Operating in the healthcare sector, UHS is strategically positioned to leverage AI and modern technologies to enhance patient care and operational efficiency. The industry's ongoing digital transformation offers opportunities for improved diagnostics and personalized medicine. UHS's adaptability to these shifts will be crucial for maintaining its competitive edge.

The Bull Case

For value and GARP investors, UHS presents a compelling opportunity. The company boasts a strong ROIC of 16.42%, indicating efficient capital allocation. A Piotroski F-Score of 7 suggests solid financial health, while a Free Cash Flow Yield of 8.40% underscores its ability to generate cash. These metrics highlight UHS's pricing power and operational efficiency, making it an attractive buy for those seeking undervalued growth.

The Bear Case

Despite its strengths, UHS faces structural risks that cannot be ignored. The Price/Book ratio of 1.38 and Price/Sales ratio of 0.60 suggest the stock is not excessively valued, yet its Free Cash Flow conversion remains a concern with an EV to FCF of 17.50. Additionally, the stock's proximity to its 52-week low raises questions about market confidence. Investors should be wary of potential cash flow volatility and sector-specific headwinds.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Hold

Average Analyst Price Target

$226.00

Institutional Ownership %

1-Year Beta

1.13 Insider Buying % (6 Mo)

Distance to 52-Week High

64.31%

Distance to 52-Week Low

1.03%

EARNINGS SURPRISE %

6.24%

50-DAY SMA

$174.84

200-DAY SMA

$200.57

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.