Why Is Tenet (THC) Down 3.2% Since Last Earnings Report?

It has been about a month since the last earnings report for Tenet Healthcare (THC). Shares have lost about 3.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Tenet due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Tenet Healthcare Corporation before we dive into how investors and analysts have reacted as of late.

Tenet Healthcare Beats Q4 Earnings: But 2026 EBITDA Margin May Decline

Tenet Healthcare reported fourth-quarter 2025 adjusted earnings per share (EPS) of $4.70, which surpassed the Zacks Consensus Estimate by 15.2%.

The bottom line increased 36.6% year over year.
Net operating revenues advanced 8.9% year over year to $5.53 billion. The top line beat the consensus mark by 1.4%.

The quarterly results benefited from higher same-facility revenues, a favorable payer mix and improved acuity. Facility buyouts boosted the performance of the Ambulatory Care segment. However, the upside was partly offset by rising operating costs, particularly supply expenses.

Inside THC’s Q4 Performance

Adjusted net income of $413 million climbed 25.2% year over year in the quarter under review.

Adjusted EBITDA improved 12.9% year over year to $1.18 billion, higher than our estimate of $1.13 billion. The year-over-year growth was backed by improved same-facility revenues, acuity and prudent expense management efforts. Adjusted EBITDA margin expanded 70 basis points year over year to 21.4%.

Salaries, wages and benefits costsincreased 6.1% year over year to $2.2 billion in the fourth quarter, while supply costs rose 8.6% and net other operating expensesincreased 10.8%.

Q4 Segmental Details

Hospital Operations and Services: The segment recorded net operating revenues of $4.09 billion, which inched up 7.3% year over year on the back of improved Medicaid supplemental revenues, higher acuity and favorable payer mix. The metric beat our model estimate of $4.01 billion.

Adjusted EBITDA climbed 16.4% year over year to $603 million in the fourth quarter, driven by higher same-facility revenues, a favorable payer mix and prudent expense management efforts. Adjusted EBITDA margin of 14.7% improved 110 bps year over year.

Ambulatory Care: The segment’s net operating revenues rose 13.8% year over year to $1.43 billion in the quarter under review on the back of improved same-facility net patient services revenues, facility buyouts and expansion of service lines. The metric topped our estimate of $1.36 billion.

Adjusted EBITDA was $580 million, which advanced 9.4% year over year. The metric marginally beat our estimate of $579.1 million. Adjusted EBITDA margin deteriorated 160 bps year over year to 40.5%.

THC’s Financial Position (as of Dec. 31, 2025)

Tenet Healthcare exited the fourth quarter with cash and cash equivalents of $2.88 billion, which declined from the 2024-end level of $3.02 billion. Total assets of $29.7 billion rose from the figure of $28.9 billion at 2024-end.

Long-term debt, net of the current portion, amounted to $13.1 billion, which inched up marginally from the figure as of Dec. 31, 2024. The current portion of long-term debt totaled $79 million.

Total shareholders’ equity of $4.22 billion increased from the 2024-end level of $4.17 billion.

THC generated $3.5 billion of net cash from operations in 2025, which advanced 72.9% year over year. Free cash flows improved 126.7% year over year to $2.5 billion in 2025.

THC’s Share Repurchase Update

THC bought back common shares worth $198 million in the fourth quarter and $1.4 billion in 2025. The company had a leftover share repurchase authorization of around $1.49 billion.

THC Provides Outlook for 2026

Net operating revenues are expected to be within $21.5-$22.3 billion, higher than $21.3 billion in 2025 (up from $20.7 billion in 2024). Net operating revenues of the Hospital segment are forecasted to lie between $16 billion and $16.6 billion. The metric at the Ambulatory Care unit is estimated at $5.5-$5.7 billion.

Adjusted EBITDA is likely to remain between $4.485 billion and $4.785 billion in 2026, compared with the 2025 figure of $4.566 billion. However, adjusted EBITDA margin is estimated to be in the 20.9-21.5% band, the mid-point of which indicates a decline from the 2025 level of 21.4%. Adjusted EPS for 2026 is anticipated within $16.19-$18.47 compared with $16.78 in 2025 (up from $11.88 in 2024).

Net cash provided by operating activities is now expected to be between $3.64 billion and $4.09 billion. Free cash flow is now estimated to remain between $2.94 billion and $3.29 billion. Capital expenditures are projected in the range of $700-$800 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a flat trend in estimates revision.

VGM Scores

At this time, Tenet has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock has a grade of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Tenet has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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