THC

Tenet runs hospitals and ambulatory surgery centers, and the FY2025 picture is far better than the optically alarming earnings decline suggests. Net income fell 41.8% to $2.37B and EPS dropped 52.6% to $15.49, but that is versus an FY2024 ($4.06B) that was inflated by one-time gains; the FY2025 result is well above the $1.0B-$1.5B the company earned in FY2021-FY2023. On a normalized basis, profitability is strong: operating margin 16.5%, net margin 11.1%, and an exceptional return on equity of 56.1%.

Cash generation is the standout. Operating cash flow surged 72.9% to $3.54B against $1.01B of capex, and the company deployed $1.39B into buybacks (+106.3%), shrinking the share count 8.6% — a powerful tailwind for per-share value at a low multiple. Revenue grew a steady 3.1% to $21.3B, retained earnings rose 46.8% to $4.42B, and cash sits at $2.88B. The balance sheet is leveraged (liabilities/equity 4.91x), but that is normal for a hospital operator and is supported by the heavy, growing cash flow.