Highlights

  • Tenet Healthcare shows 64.50% basic EPS growth, a P/E of 10.43, PEG of 0.00.
  • Second quarter net operating revenues were $5,628 million, up 6.8%, against $5,271 million.
  • Second quarter basic earnings per share were $9.89, against $3.16 a year earlier.
  • Tenet repurchased 7.021 million shares in six months; $2.130 billion remained available.

One-year earnings growth of 64.50%, paired with a trailing twelve-month P/E of 10.43 and an expected-basis PEG of 0.00, puts Tenet Healthcare (NYSE:THC) among undervalued growth stocks, with shares trading at USD 268.96 on October 28, 2026, up 2.64%. In its latest disclosures, the hospital and ambulatory surgery operator entered the Omnibus Agreement with CommonSpirit Health on January 27, authorized an additional $2.000 billion for share repurchases in June, and filed second quarter 2026 results on July 29 showing net income available to common shareholders of $826 million.

Tenet Healthcare is based in Dallas, Texas, and incorporated in Nevada. Its Hospital Operations segment included 50 acute care and specialty hospitals in eight states and 135 outpatient facilities at June 30, 2026, and provides revenue cycle management and value-based care services through Conifer Health Solutions. Its Ambulatory Care segment, USPI, held ownership interests in 538 ambulatory surgery centers and 26 surgical hospitals in 37 states.

Growth: Second Quarter Earnings, Revenues and Admissions

Net income available to Tenet common shareholders was $826 million in the second quarter against $288 million a year earlier, and $1,528 million for the six months against $694 million. Basic earnings per share were $9.89 against $3.16 for the quarter and $17.94 against $7.49 for the six months. Diluted earnings per share were $9.84 against $3.14 for the quarter.

Net operating revenues increased 6.8% to $5,628 million. Hospital Operations revenues rose 6.0% to $4,240 million, which the company attributed primarily to higher patient volumes, partially offset by payer mix. Ambulatory Care revenues rose 9.3% to $1,388 million, mainly from acquisitions and de novo development. Revenue from contract termination, related to the Omnibus Agreement, was $413 million for the quarter and $826 million for the six months.

Total admissions rose 2.8%, adjusted admissions rose 3.2% and charity and uninsured admissions rose 19.2%.

Valuation: P/E of 10.43, PEG of 0.00 and Cash Flow

The P/E ratio of 10.43 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 on expected growth. Net cash provided by operating activities was $2.226 billion for the six months against $1.751 billion; the company cited $540 million of contract termination payments received in 2026.

On the second quarter call, Chief Financial Officer Sun Park said the company's valuation supported its repurchase activity, describing the shares as very well discounted based on free cash flow yield. The company said it expects adjusted free cash flow after noncontrolling interests of $1.825 billion to $2.055 billion in 2026.

Capital Deployment: Repurchases, Debt and Liquidity

In the second quarter Tenet paid $1.042 billion to purchase 5.675 million shares, and it repurchased 7.021 million shares in the six months. The board authorized $1.500 billion in July 2024, a $1.500 billion increase in July 2025 and a further $2.000 billion in June 2026; $2.130 billion was available at June 30, 2026.

Cash and cash equivalents were $2.170 billion at June 30, 2026. The Credit Agreement provided up to $1.900 billion of revolving loans, with no cash borrowings outstanding. Senior notes carried aggregate principal of $12.662 billion at fixed rates, with maturities from November 2027 through November 2033. Total long-term debt was $13,248 million. Under the Omnibus Agreement, CommonSpirit Health delivered a $1.360 billion non-interest-bearing promissory note requiring three annual payments of approximately $453 million.

Disclosed Risks and Outlook

The company disclosed that enhanced premium tax credits for marketplace coverage expired at the end of 2025, producing higher premiums and lower enrollment, and said it expects an adverse impact on patient volumes, payer mix and revenues. Managed care was 67.3% of net patient service revenues against 70.2%, and Medicaid was 13.8% against 11.0%. Tenet said it cannot estimate the effect of the OBBBA or its timing and that it may see decreased payments, including supplemental payments. It also said it operates in a highly regulated and litigious industry and that adverse legal outcomes could be material to results or cash flows in a given period.

The Conifer revenue cycle agreement with CommonSpirit Health is to conclude by December 31, 2026.

On its second quarter call, management raised 2026 guidance: net operating revenues of $21.9 billion to $22.5 billion, adjusted EBITDA of $4.83 billion to $5.03 billion, USPI adjusted EBITDA of $2.16 billion to $2.22 billion and hospital adjusted EBITDA of $2.67 billion to $2.81 billion. Management also expects ambulatory acquisition spending above $300 million in 2026.