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Tenet Healthcare Corp THC Stock Quote

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Morningstar‘s Stock Analysis THC

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Continued Deleveraging at Tenet Is Reducing Its Capital Costs

Julie Utterback, CFA Senior Equity Analyst

Business Strategy and Outlook

| Julie Utterback, CFA |

Since late 2017, Tenet Healthcare has undergone a massive turnaround effort in the wake of an acquisition strategy that left it with operating inefficiencies and a debt-heavy balance sheet. Led by initiatives endorsed by a large shareholder, Glenview Capital Management (7% stake as of March 2022), Tenet has replaced top leadership, refreshed the board, improved governance practices, pruned its portfolio of assets, and undergone a restructuring effort. Operationally, Tenet has focused on flattening layers of management, improving operating efficiencies both inside and outside its healthcare facilities, and increasing focus on service quality. All these factors appear to be positively influencing returns on invested capital at Tenet, which began exceeding its weighted average cost of capital in 2017 by our calculations for the first time since The Vanguard Group acquisition in 2013. We applaud those trends. We also view the firm's increasing focus on the high-margin ambulatory surgery business, which Tenet management expects to generate about half of company profits by 2023, as a strong strategic choice.

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Key Statistics THC

Company Profile THC

Business Description

Tenet Healthcare is a Dallas-based healthcare services organization. It operates a collection of hospitals (60 as of March 2022) and about 550 ambulatory surgery centers and other outpatient facilities across the U.S., primarily in the south. Through its Conifer segment, Tenet also provides revenue cycle management solutions. By adjusted EBITDA excluding grant income, hospitals accounted for about 55%, ambulatory services accounted for 35% and Conifer accounted for about 10% of Tenet in 2021.

Contact
14201 Dallas Parkway, Suite 1400
Dallas, TX, 75254
T +1 469 893-2200
Industry Medical Care Facilities
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Employees 101,100

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