* Note: Prices are in Million (M) USD.
Description:
Tenet Healthcare Corporation is a diversified health services company. The company is headquartered in Dallas, Texas.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $2,625 M
Debt : $13,175 M
EBITDA : $4,615 M
Net Debt (Debt - Cash): $10,550 M
Since Net Debt is covered by EBITDA within 3 years, 1 points assigned.
This criteria used industry in which company operates:
Sector: Healthcare
Industry: Medical care
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 11.27
Since Forward PE Ratio is less than 15, 5 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $313 M
Average Revenue: $14,574 M
Revenue Converted To Free Cash Flow (%): 2.1%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $20,665 M
Revenue 4 Years Ago (2020-12-31): $17,640 M
Last 5 Years Average Revenue Growth: 3%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $98 M
Share Count 5 Years Ago (2020-12-31): $106 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $16.75
Trailing 12-Month Earnings Per Share (EPS): $16.00
Average Earnings Per Share (EPS): $16.38
Dividend Per Share (DPS): $0
Payout Ratio: 0%
Dividend Yield: 0%
Since Dividend Per Share is less than or equal to 0, 0 point assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 17 valid ROE years (max 20).Average ROE: 153.3%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $185
52-Week Low: $110
Threshold Price (15% Above 52-Week Low): $126
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $14,231 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 21 points to above Tenet Healthcare Corporation (THC) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 15 Years Avg P/E (13.62)
× EPS ($16.38) = $223.03.
Last 15 Years Avg PE 13.62, Fair Value PE 15, Industry Based PE 15, Growth Based PE 3, RCFC Based PE 11.72, ROE Based PE 50, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 17.92. Value-Trades has assined P/E value 17.92. Since an average (Current Year EPS + Next Year EPS) earning per share is $16.375.
The fair value of Tenet Healthcare Corporation (THC) stock should be (17.92 x $16.375) = $293.4.
