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With a market cap of $89.2 billion, Tennessee-based HCA Healthcare, Inc. (HCA) is one of the largest non-governmental operators of acute care hospitals in the U.S. The company manages hospitals and related healthcare entities, offering a range of outpatient services such as surgery, laboratory tests, radiology, respiratory therapy, cardiology, and physical therapy.
Companies valued at $10 billion or more are generally considered "large-cap" stocks and HCA Healthcare fits this criterion perfectly. With over 180 hospitals and approximately 2,400 care sites, HCA Healthcare harnesses data from over 43 million patients encountered each year to propel scientific advancements and elevate patient care across its network. As one of the nation's leading healthcare providers, HCA Healthcare boasts a strong presence in the U.S. and the United Kingdom, cementing its role at the forefront of the industry.
However, the healthcare company is trading slightly below its 52-week high of $343.53, hit on June 12. Shares of HCA gained 4.1% over the past three months, outpacing the broader Dow Jones Industrials Average's ($DOWI) marginal gain over the same time frame.
Over the longer term, HCA is up 25.9% on a YTD basis, easily overshadowing the DOWI's 3% gains. Moreover, shares of HCA have surged nearly 17.4% over the past 52 weeks, compared to the DOWI’s 13.2% returns over the same time frame.
The stock has been trading above its 200-day moving average since December last year and has also remained above its 50-day moving average during this period, despite some fluctuations, indicating a bullish price trend.
Despite early challenges like fluctuating occupancy rates and heightened reliance on costly contract labor during the pandemic, HCA Healthcare's shares have surged, driven by its resilience and strong financial performance in recent years. Investors are drawn to the company’s substantial advantage in the healthcare industry, rooted in enduring relationships that pose significant barriers to entry for newcomers.
Furthermore, following the company’s better-than-expected Q1 earnings results announced on Apr. 26, the stock popped almost 1.5% in the subsequent trading session. The strong quarterly results were driven by a surge in patient volumes and an increase in surgical procedures, which made a substantial contribution to HCA Healthcare's revenue growth.
To emphasize HCA’s outperformance, its rival Humana Inc. (HUM) is underperforming– not just HCA but also the broader equity benchmark. HUM’s shares have pulled back nearly 23.7% on a YTD basis and 21.6% over the past 52 weeks.
Given HCA’s strong price action, analysts are highly bullish about its prospects. Among the 22 analysts covering the stock, there is a consensus rating of “Strong Buy,” and it is currently trading below the mean price target of $347.59.
On the date of publication, Anushka Mukherjee did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
