Tenet Healthcare Corporation Common Stock (THC)

FairStock Score: 73/100 — STEADY

Key Financials

Strengths

• Generates $1.7 billion in annual free cash flow (10.1% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 27.0% demonstrating efficient capital deployment
• FairStock composite score of 73/100 places it in the top tier across value, quality, and momentum factors
• Established organization with 77,000 employees providing operational scale

Concerns

• Altman Z-Score of 1.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Tenet Healthcare Corporation Common Stock is a mid-cap healthcare company valued at $16.6 billion. The business generates $21.3 billion in annual revenue with a 1.7% net margin and $1.7 billion in free cash flow. From a quality standpoint, Tenet shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 1.1 warrants caution. On valuation, the stock is attractively valued at 12.2x earnings, with trades above its Graham Number with a negative 45% margin. Growth dynamics show revenue growing at 9.0% and profit growth of 16.7%. Our composite FairStock Score of 73/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Tenet's consistent 27% ROE at just 12x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $1.7 billion in annual free cash flow (10.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the healthcare space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer