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What this page is: Delvantic's full research page for Universal Health Services, Inc. (UHS) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-10-07): Designation Watch · Gem Score -5 (−100…+100 Quality+Value blend) · Quality 40 · Value -35 · Sentiment 0 (timing only, not weighted) · Composite fair value $333.34 vs $175.81 at analysis
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Universal Health Services, Inc.
UHS NYSEUniversal Health Services, Inc. is a healthcare services company that owns and operates a broad network of facilities across the United States. The company focuses on two primary segments: Acute Care Hospital Services and Behavioral Health Services. Its acute care operations include general hospitals, surgical hospitals, freestanding emergency departments, and ambulatory surgery and oncology centers, providing medical, surgical, and emergency care to a wide range of patients. The behavioral health segment delivers inpatient and outpatient services for mental health conditions, substance use disorders, and other behavioral health needs, serving children, adolescents, adults, and seniors. Through these segments, Universal Health Services plays a significant role in the medical care facilities industry, supporting both community-based and specialized care. Headquartered in King of Prussia, Pennsylvania, the company is positioned as a major integrated provider in the U.S. healthcare system, offering essential services that span acute medical treatment, complex behavioral healthcare, and related outpatient services.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 23.10
Total Equity: $7.41B
Shares: 64,462,000
Total Debt: $4.75B
Cash: $137.80M
EBITDA: $2.61B
Total Debt: $4.75B
Cash: $137.80M
Revenue: $17.36B
Revenue: $17.36B
Revenue: $17.36B
Total Equity: $7.41B
Tax Rate: 23.4%
Equity: $7.41B
Total Debt: $4.75B
Cash: $137.80M
Current Liabilities: $3.24B
Long-Term Debt: $4.00B
Total Debt: $4.75B
Total Equity: $7.41B
Shares: 64,462,000
Shares: 64,462,000
CapEx: -$1.02B
Shares: 64,462,000
Stock Price: $170.04
Net Income: $1.49B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 3, 2026 1:10pm (65d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $12.6B | $13.4B | $14.3B | $15.8B | $17.4B |
| Cost of Revenue | — | — | — | — | — |
| Gross Profit | — | — | — | — | — |
| Operating Expenses | $11.3B | $12.4B | $13.1B | $14.1B | $15.4B |
| Operating Income | $1.4B | $1.0B | $1.2B | $1.7B | $2.0B |
| Net Income | $991.6M | $675.6M | $717.8M | $1.1B | $1.5B |
| EBITDA | $1.9B | $1.6B | $1.7B | $2.3B | $2.6B |
| EPS | $11.99 | $9.23 | $10.35 | $17.16 | $23.42 |
| EPS (Diluted) | $11.82 | $9.14 | $10.23 | $16.82 | $23.10 |
Balance Sheet (Annual)
Last updated: Aug 3, 2026 12:44pm (65d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $115.3M | $102.8M | $119.4M | $126.0M | $137.8M |
| Total Current Assets | $2.3B | $2.5B | $2.8B | $2.8B | $3.4B |
| Total Assets | $13.1B | $13.5B | $14.0B | $14.5B | $15.5B |
| Current Liabilities | $2.0B | $1.9B | $2.0B | $2.2B | $3.2B |
| Long-Term Debt | $4.1B | $4.7B | $4.8B | $4.5B | $4.0B |
| Total Liabilities | $6.9B | $7.5B | $7.8B | $7.7B | $8.1B |
| Total Equity | $6.2B | $6.0B | $6.2B | $6.8B | $7.4B |
| Retained Earnings | $6.6B | $6.5B | $6.8B | $7.4B | $8.0B |
Cash Flow (Annual)
Last updated: Aug 3, 2026 1:10pm (65d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $883.7M | $996.0M | $1.3B | $2.1B | $1.9B |
| Capital Expenditure | -$855.7M | -$734.0M | -$743.1M | -$943.8M | -$1.0B |
| Free Cash Flow | $28.0M | $262.0M | $524.7M | $1.1B | $849.2M |
| Acquisitions (net) | -$105.4M | -$20.3M | -$3.7M | -$19.0M | -$47.8M |
| Net Debt Issued / (Repaid) | -$3.0B | -$89.4M | -$85.5M | -$2.6B | -$43.5M |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$1.2B | -$832.9M | -$547.4M | -$670.8M | -$968.0M |
| Net Change in Cash | -$1.1B | $21.9M | $13.6M | $10.3M | $46.6M |
Growth Trends (YoY %)
Last updated: Aug 3, 2026 1:10pm (65d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +6.0% | +6.6% | +10.8% | +9.7% |
| Gross Profit Growth | — | — | — | — |
| Operating Income Growth | -26.4% | +17.1% | +43.1% | +18.6% |
| Net Income Growth | -31.9% | +6.2% | +59.1% | +30.4% |
| EBITDA Growth | -16.4% | +10.0% | +30.0% | +15.3% |
Dividend History (Last 20)
Last updated: Aug 3, 2026 12:44pm (65d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-06-08 | $0.20 | — | — | — |
| 2026-03-02 | $0.20 | — | — | — |
| 2025-12-01 | $0.20 | — | — | — |
| 2025-09-02 | $0.20 | — | — | — |
| 2025-06-02 | $0.20 | — | — | — |
| 2025-03-03 | $0.20 | — | — | — |
| 2024-12-03 | $0.20 | — | — | — |
| 2024-09-03 | $0.20 | — | — | — |
| 2024-06-03 | $0.20 | — | — | — |
| 2024-02-29 | $0.20 | — | — | — |
| 2023-11-30 | $0.20 | — | — | — |
| 2023-08-31 | $0.20 | — | — | — |
| 2023-05-31 | $0.20 | — | — | — |
| 2023-02-28 | $0.20 | — | — | — |
| 2022-11-30 | $0.20 | — | — | — |
| 2022-08-31 | $0.20 | — | — | — |
| 2022-05-31 | $0.20 | — | — | — |
| 2022-02-28 | $0.20 | — | — | — |
| 2021-11-30 | $0.20 | — | — | — |
| 2021-08-31 | $0.20 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-09-12 02:04| Case | Growth | Margin | Fair value | vs price ($175.81) |
|---|---|---|---|---|
| Bull — recovery | +13% | 9.7% | $340.05 | +93% |
| Base — stabilizes | +9% | 8.4% | $262.94 | +50% |
| Bear — keeps slipping | +4% | 7.2% | $199.60 | +14% |
| Stress — last quarter repeats | +8% | 8.0% | $249.49 | +42% |
| Upside — a +1σ run of quarters (v2) | +12% | 9.3% | $321.11 | +83% |
| Stress — a −1σ run of quarters (v2) | +6% | 8.1% | $237.30 | +35% |
Narrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-08-25 18:11The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
Starting with the raw tape: UHS is compounding revenue mid-to-high single digits ($3.96B in Q3'24 → $4.64B in Q2'26, roughly 17% cumulative) with net margins that expanded from 6.5% to a 7.7-9.9% band. TTM revenue is ~$18.1B, TTM net income ~$1.53B, implying trailing EPS around $25-26 on the $10.4B cap — a 6.8-7x earnings multiple on a business generating $850M FCF and 20% ROE. Debt/equity at 0.64 with $4.75B debt is manageable against $1.86B OCF (2.5x coverage on debt/OCF). ROIC 12.7% comfortably exceeds any reasonable cost of capital. This is a demonstrably cheap mature earner, not a value trap on the numbers I can see.
That said, the quarterly deceleration flag is real and the models underweight it. Sequential revenue: Q4'25 $4.49B → Q1'26 $4.50B → Q2'26 $4.64B is fine, but net income went $445.9M → $348.7M → $358.4M — margins compressed from 9.9% to ~7.7% in two quarters. That's a ~220bp margin give-back worth roughly $100M/quarter or $400M annualized against a $1.5B earnings base — a 25%+ earnings headwind if it sticks. The synthesis's "slight upside" $186 fair value assumes margins hold; if Q2's 7.7% is the new run-rate, TTM earnings roll toward $1.3B and the P/E creeps to 8x — still cheap, but the "44% earnings CAGR" momentum number is a rearview artifact that's already breaking.
The contrarian case the models mostly wave at: behavioral health regulatory risk is not theoretical. UHS's psychiatric segment has faced DOJ scrutiny and state-level billing investigations historically, and the segment is a disproportionate margin contributor. A 7.6x P/E for a hospital operator with 20% ROE isn't a mispricing — it's the market pricing tail risk on reimbursement or a legal overhang. Peers like HCA trade at ~13x not because they're better operators but because they're pure acute care without the behavioral optionality/liability. The insider J-Other transactions on 5/27 (five filings same day totaling ~114K shares) look like planned dispositions or gifts, not conviction buying — the models flagging "no insider transactions" missed this entirely. That's a data hygiene failure worth noting. Also: current ratio 1.05 and $138M cash against $4.75B debt is thin liquidity for a capex-heavy operator ($1.02B annual capex nearly consumes OCF ex-working-capital swings).
Where I land: the synthesis's $186 anchor is defensible but the "signal-adjusted $186.67" feels like false precision on a name where the margin question dominates. On normalized 8% net margins and 6-8% revenue growth, $18.5B revenue × 8% = $1.48B earnings, apply 9-10x (a modest re-rating for a defensive compounder with proven FCF), gets $13-15B equity value or $220-255/share. On bear-case 7% margins and regulatory overhang keeping the multiple at 7x: $1.30B × 7 = $9.1B or ~$155. Current $176 sits in the lower third of that range. I partially agree with the slight_upside verdict but think conviction should be higher than "mild" — the asymmetry favors longs at 7x earnings with 20% ROE and $850M FCF, even accounting for the Q2 margin wobble. The narrative layer is right that no story premium exists; that's exactly why the entry is attractive. My dissent from the synthesis is directional intensity, not direction: this isn't +6%, it's a plausible +25-40% over 18-24 months if margins stabilize anywhere near 8.5%, with downside cushioned by the FCF yield (~8%) and buyback capacity.
GPT Reading
What jumps out is that UHS is not merely “cheap on trailing numbers”; it has actually been executing into that cheapness. Revenue has climbed from $12.64B in 2021 to $17.36B in 2025, a 37% increase, while net income rose from $992M to $1.49B despite 2022-2023 being a difficult labor-cost period for hospitals. The quarterly run-rate in 2026 is stronger still: first-half revenue of $9.14B is up about 9.9% versus $8.32B in 1H25, and first-half net income of $707.1M is up roughly 5.3% from $669.9M. That is not explosive growth, but for a hospital operator trading at 7.6x earnings and 5.8x EV/EBITDA, it is more than adequate. The business is producing real operating leverage over a multi-year frame: operating income went from $1.18B in 2023 to $1.99B in 2025, and ROE is now 20.1% with ROIC at 12.7%, both strong for a supposedly ex-growth, reimbursement-constrained operator.
The more important point is that the market multiple implies a business with either fragile earnings or balance-sheet stress, and I do not see either in the data provided. Net debt is about $4.61B against a $10.4B equity value and a business generating $1.86B of operating cash flow. Debt-to-equity at 0.64 is manageable, and while cash on hand is light at $138M, this is a stable cash-conversion model rather than a liquidity-dependent story. Capex is heavy at $1.02B, which suppresses free cash flow to $849M, but that still leaves an FCF yield around 8% on market cap. Put differently, the stock is priced as if current earnings are near peak, yet the last seven reported quarters show a fairly tight band of profitability with net margins mostly between 7.7% and 9.9%, not a spike-and-collapse pattern. Even if I haircut 2025 net income by 15% to around $1.27B, the stock would still sit near 8.2x earnings, which is hard to call expensive for a defensive provider with demonstrated volume and pricing resilience.
I also think some of the “below sector benchmarks” framing misses the direction of travel. Yes, hospital operators rarely deserve premium multiples because reimbursement, wage inflation, and regulation cap upside. But UHS has grown annual revenue by $3.1B since 2023 while expanding operating margin from 8.3% to 11.5%. That is not just cyclical recovery; it suggests the company has absorbed prior cost inflation and rebuilt economics. The quarterly sequence from $3.96B revenue/6.5% net margin in 3Q24 to roughly $4.5B-$4.6B revenue and high-7% to high-9% margins through 2025-2026 shows a higher earnings base has formed. If the market were valuing this as a no-growth utility, 10x-11x earnings would already be conservative; on 2025 earnings that would imply roughly $231-$253 per share-equivalent valuation logic before any major 2026 improvement. I would not pay that full number because hospital earnings deserve a discount, but it makes the current $176 look more like a skepticism discount than fair value.
The best case against this view is that hospitals always look cheapest right before margins mean-revert lower. UHS’s current ratio is only 1.05, cash is thin, capex needs are substantial, and a business with $4.75B of debt plus only a 0.45% dividend is implicitly retaining cash because the operating environment remains demanding. The quarter-to-quarter margin profile also argues against calling this a pristine compounder: net margin was 9.9% in 4Q25 but slipped back to 7.8% and 7.7% in the first two quarters of 2026, even as revenue increased. A bear would say that revenue growth is increasingly reimbursement- and rate-driven while labor and supply costs prevent that growth from fully dropping through. They would also point out that annual net income in 2021 was still almost $1.0B on only $12.6B of revenue, so this is not a business with a clean linear margin expansion story; it is structurally volatile and exposed to payer and regulatory shifts, especially in behavioral health where any policy scrutiny can hit sentiment fast.
What would change my mind is not a modest miss but evidence that 2025 was the earnings peak. If the next two quarters show revenue still growing mid-single digits but net margin falling toward 6%-6.5%, or if annualized operating cash flow slips materially below $1.6B while capex stays near $1.0B, then the low multiple would be justified as a value trap. Likewise, if net debt starts rising despite revenue growth, that would tell me capital intensity is eating the equity story. Absent that, I think the current price still discounts too much bad news for a company that has already put up two years of very visible recovery and is trading at valuation levels usually reserved for stagnation.
Grok Reading
The numbers on UHS describe a business that has quietly compounded its way out of the 2022–23 earnings trough and is still being priced as if that trough is the permanent state. Revenue climbed from $12.64B in 2021 to $17.36B in 2025, a 10.3% CAGR, and the last eight quarters show the same trajectory in real time: $3.96B → $4.11B → $4.10B → $4.28B → $4.50B → $4.49B → $4.50B → $4.64B. Net income is the sharper story. Annual NI went from $676M (2022) to $718M to $1.14B to $1.49B; trailing quarterly run-rate NI is roughly $1.5B-plus. That is a 44% earnings CAGR against a 7.6x trailing P/E and 5.8x EV/EBITDA. ROE sits at 20.1%, ROIC at 12.7%, operating margin at 11.5%, and free cash flow for 2025 was $849M after $1.02B of capex—an 8-plus percent FCF yield on a $10.4B equity value. At $176 the market is paying roughly 0.65x sales and 1.5x book for a dual-segment acute-care and behavioral-health operator that is still growing mid-to-high single digits with expanding absolute profits. That is not a fair multiple for this cash-flow profile; it is a skeptical multiple.
What stands out against the prior models is how timid the valuation synthesis is relative to the raw income statement. A composite fair value of $175–$187, implying only ~6% upside, treats a sub-8x earner with 20% ROE and double-digit top-line growth as roughly correctly priced. That only holds if you assume the recent margin recovery fully reverses and growth collapses. The data do not force that assumption. Operating income scaled from $1.00B (2022) to $1.68B to $1.99B; net margins have held in a 7.7–9.9% band across the last eight quarters rather than rolling over. Debt of $4.75B against $7.41B of equity (D/E 0.64) and $1.86B of operating cash flow is serviceable, not fragile, even with a thin $138M cash balance. The “mature earner” archetype and “steady-compounder” narrative both fit, but the price still embeds a mid-cap hospital discount and labor-cost fear that the last three years of reported results have steadily eroded. Below-sector-benchmark secondary signals and “decelerating” quarterly revenue trend are real observations, yet 9.7% recent revenue YoY and 30% earnings YoY are decelerations from exceptional, not into stagnation.
The strongest case against this read is margin sustainability and the payer/regulatory overlay on behavioral health. The cleanest quarter in the set—Q4 2025 at 9.9% net margin and $446M NI—has already given way to 7.7–7.8% in the two most recent prints, and hospital labor inflation has a long history of reasserting itself. Net debt near $4.6B leaves limited cushion if volumes soften or rates stay restrictive, and the current ratio of 1.05 is tight. Sell-side skepticism about behavioral-health reimbursement and potential legislative scrutiny of psych-facility billing is a legitimate overhang that a 7.6x multiple may already be correctly discounting rather than mispricing. If the earnings CAGR of 44% was largely a one-time recovery from under-earning years, normalizing growth to mid-single digits on a mature facility base would make today’s EV/EBITDA of 5.8x look less anomalous and the model’s $175–$187 band more appropriate. Insider filings are noise—awards and “J-Other” transfers, not open-market conviction—and the stock has already pulled back roughly 28% from highs, which can mean either opportunity or a correctly anticipated fundamental step-down.
I would flip if trailing net margins sustainably break below 7% on a multi-quarter basis, if revenue growth settles under 4–5% YoY while labor costs keep rising, or if a concrete reimbursement cut or regulatory action lands on the behavioral segment that permanently impairs the earnings power the market is currently refusing to capitalize. Conversely, two more quarters of revenue above $4.6B with net margins holding 8%+ and FCF remaining near $800M-plus would make the current multiple look negligent and force a re-rating toward peer hospital multiples in the low-to-mid teens P/E.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
UHS is executing well as a mature healthcare operator. Revenue compounded from $12.64B (2021) to $17.36B (2025), roughly 8.3% CAGR, while operating margin recovered from a 2022 trough of 7.5% to 11.5% in 2025 and net income more than doubled from $675.6M to $1.49B over three years. Cash conversion is genuine: OCF/NI at 1.44x, accruals -2.9% of assets, Altman Z of 3.04, and FCF of $849M in 2025 (down from $1.12B in 2024, worth watching but not alarming given the multi-year ramp from $28M in 2021).
Verify before trusting this (5)
- Debt maturity ladder and refinancing terms for the $748.2M short-term portion
- Payer mix concentration (Medicare/Medicaid vs commercial) and behavioral vs acute segment mix
- Nature of the May-2026 Alan B. Miller J-Other transactions (estate/gift/trust transfer?)
- Drivers of the 2025 FCF step-down vs prior year despite higher net income (working capital or capex?)
- Any litigation or DOJ overhangs in the behavioral health segment
The composite fair value of $174.78 sits within 1% of the $175.81 price, and the signal-adjusted FV of $186.67 implies just ~6% upside - inside the noise band for a levered acute-care operator. The DCF at $204.72 (~16% upside) and the EPV floor at $114.91 (~35% downside) bracket a wide range, which itself argues the market has landed on a reasonable midpoint rather than mispricing the name in either direction. Earnings quality is clean, so no haircut is warranted, but that clean quality is already reflected in a price that fully credits the margin expansion and buyback story. To justify materially higher, you need continued behavioral-health pricing power and no labor-cost reversion - not heroic, but not a gift either. With $4.6B net debt and negligible cash, the EPV floor matters: any operational stumble compresses the multiple fast. I need a real discount to the composite before this is interesting - fair is fair, and fair is not a buy.
Verify before trusting this (5)
- Behavioral-health same-facility revenue and pricing trends in the next 10-Q
- Labor cost per adjusted admission and any signs of contract-labor normalization
- Pace and average price of ongoing buybacks vs authorization remaining
- Refinancing schedule and rates on the $4.6B net debt stack
- Any DOJ or state-AG updates on behavioral-health pricing scrutiny
The non-fundamental pressure on UHS is muted in both directions. The market regime is mildly constructive (slight tailwind, VIX ~16, S&P barely off highs), and with a beta near 1 UHS neither amplifies nor dampens that tape meaningfully. There is no active narrative running the stock: the archetype is 'steady-compounder' with minimal intensity, low cult coefficient, and durable framing - the market simply is not telling a story here, which cuts both ways (no mania to fade, no collapsing thesis to punish). Analyst tone is described as 'cautiously optimistic' despite UHS lagging the tape, which is a mild positive drift but not a re-rating catalyst. News flow is benign - a conference presentation and a neutral analyst recap - nothing to move sentiment. The one identifiable headwind is macro: 10y at 4.74% and a stretched market PE weigh on capital-intensive hospital operators with leverage, though UHS's improving D/E (0.79 to 0.64) blunts that pressure. Net: this is a quiet name in a quiet tape, with the sentiment lens essentially neutral.
Verify before trusting this (4)
- Any headline on behavioral health billing legislation or DOJ/CMS scrutiny that could reignite the bear story
- Labor cost commentary at September healthcare conferences - a hawkish tone would harden the wage-inflation overhang
- Sector rotation into or out of defensive hospitals if the tape turns risk-off
- Target revisions from sell-side following conference presentations
Hospital demand is in a genuine post-pandemic normalization-plus-utilization upcycle: aging demographics, higher acuity, and unmet behavioral need all push volumes up, while the operator side has consolidated so scale players capture the incremental patient. The offsetting force is entirely fiscal, not demand-side — Washington and the states are the marginal payer, and the direction of travel on exchange subsidies, Medicaid supplemental/directed payments and site-neutral payment is restrictive. So the world supports volume growth for years but threatens revenue-per-unit later this decade. Macro is a second-order drag: a 4.74% 10y raises the cost of the capex that funds UHS's share gain, though the business itself is defensive and largely non-discretionary.
When we made this prediction on Aug 26, 2026, UHS was $179.16. We expect it to be $195.50 by Feb 2027, and we consider it great value under $150.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 26, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.
Post-Report Due Diligence NOTES
Evidence for a closer look, not a verdict — no score or designation on this page has been changed by it. Items marked material are ones where a conclusion above moves to the other side of the price.
adjusted_earnings
flips up 25%
cost_of_capital
flips down 25%