UHS Shares Rise 1.61% on Earnings and Strategic Shifts as High-Volume Stock Strategy Yields 166% Return

Universal Health Services (UHS) closed July 30, 2025, with a 1.61% gain, trading at a daily volume of $0.30 billion. The stock’s performance followed the release of Q2 2025 earnings, which highlighted a 10% year-over-year increase in same-facility acute care EBITDA and a 5.7% rise in same-facility acute care net revenues. Adjusted EPS reached $5.35, exceeding expectations, while the company raised its 2025 EPS guidance midpoint to $20.50, a 7% increase. However, cash from operations declined by $167 million year-to-date, and new facilities like the Cedar Hill Regional Medical Center in Washington, D.C., contributed $25 million in Q2 losses due to certification delays.

Key operational updates included the opening of two behavioral health facilities in Michigan and South Carolina, along with plans to expand outpatient services. Management emphasized strategic focus on outpatient behavioral care, where growth outpaced inpatient segments. Despite challenges such as Medicaid reimbursement reductions projected to impact earnings by $360–400 million by 2032, UHS outlined adaptive measures, including AI integration in revenue cycle management and clinical follow-ups. The company also repurchased 1.9 million shares for $332 million year-to-date, leveraging $1 billion in available borrowing capacity to fund operations and growth initiatives.

The 2025 EPS guidance increase and capital allocation strategy were underscored by management’s confidence in navigating regulatory shifts, such as the One Big Beautiful Bill Act, which may constrain Medicaid payments starting in 2028. While Cedar Hill’s EBITDA drag is expected to persist through the second half of 2025, the facility is projected to achieve divisional profitability by 2026. UHS’s focus on operational efficiency, combined with disciplined expense management and expansion in high-growth behavioral health outpatient care, positions the company to mitigate near-term headwinds and sustain long-term earnings momentum.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day yielded a 166.71% return from 2022 to the present, significantly outperforming the benchmark return of 29.18%. The strategy's excess return was 137.53%, and it achieved a CAGR of 31.89%. This conclusion is based on the following points: significant outperformance, excess return analysis, compound annual growth rate, and risk metrics indicating robust risk-adjusted returns.