HCA Healthcare, Inc. (HCA): what the price assumes
boothcheck covers HCA Healthcare, Inc. (HCA) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-27.
Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/HCA
Headline
| Field | Value |
|---|---|
| Ticker | HCA |
| Company | HCA Healthcare, Inc. |
| Current price | $417.82/sh |
| Composition | Medicare 15% / Managed Medicare 18% / Medicaid 8% / Managed Medicaid 5% / Managed care and other insurers 49% / International (managed care and other insurers) 2% / Other 3% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 6.5% |
| Operating margin today | 12.8% |
| Margin compression (value-band) | -6.3pp |
| Multiple paid | 15x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 6.9% sits below it).
How unusual the bet is: n/a
| Reference | Value |
|---|---|
| cohort percentile (of 115 peers) | 21 |
Valuation X-Ray
Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | — | 0 | — |
| Earnings | 2.90x | 3 | expensive |
| Relative | — | 0 | — |
| Growth | — | 0 | — |
Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.1%); the inversion above states its own rate.
Per-Model Detail (n=3)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $712.69 | 0.59x | no | Exit EV/EBITDA: 38.8x / 40.8x / 42.8x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 18x (static sector reference · 2026-04), scenarios: 15.1x / 18.0x / 20.9x (bear / base = reference held flat / bull), EV/EBITDA 20.63x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | — | — | no | — |
| Two-Stage Excess Return | Asset | — | — | no | — |
| Discounted Future Market Cap | Growth | $434.20 | 0.96x | no | Rev $76.4B, growth 7% (input: historical growth; tapered), Terminal P/S: 1.0x / 1.2x / 1.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $870.30 | 0.48x | no | EPS $29.03, growth 30% (input: historical EPS growth), PEG=0.45 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $3.59B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $143.84 | 2.90x | yes | FCF $7927.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $124.89 | 3.35x | yes | SBC-adj FCF $7.54B (FCF $7.93B − SBC $0.39B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $936.70 | 0.45x | yes | EPS $29.03 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | Revenue $76.39B × sector P/S 2.5x |
| PEG Fair Value | Relative | $1088.63 | 0.38x | no | EPS $29.03 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $313.84 | 1.33x | no | EPS $29.03 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| National Group | operating | enterprise | $21.3b | — | withheld | unresolved no unit value |
| Atlantic Group | operating | enterprise | $24.7b | — | withheld | unresolved no unit value |
| American Group | operating | enterprise | $26.4b | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $52.7b |
| Net debt / NOPAT (after-tax) | 6.63x |
| Net debt / operating income (pre-tax) | 5.38x |
| Interest coverage | 4.3x |
| Share count CAGR (buyback) | -7.3% |
| Burning cash | no |
Bullet Takeaways
- HCA is the largest for-profit hospital operator in the country, and its scale lets it raise revenue per admission even when volumes are soft: Q1 2026 revenue rose 4.3% to $19.1 billion while same-facility admissions grew under 1%.
- The biggest risk is the balance sheet, not the operations: net debt of roughly $53 billion sits at about 5.6 times operating income, and the company runs with negative book equity by design.
- Watch volume normalization and the buyback pace: HCA repurchased $1.571 billion of stock last quarter with $9.179 billion left on the authorization, and the share count is shrinking about 7% a year.
Bull Case
The trajectory is the bull case. Over the last several quarters HCA has kept revenue and earnings grinding higher even as patient volumes softened, which is the signature of a company whose pricing and mix do the work when traffic does not. In Q1 2026 revenue rose 4.3% year over year to $19.1 billion and diluted earnings per share climbed 10.9% to $7.15, despite same-facility admissions growing only 0.9% and a respiratory season that ran 42% below the prior year. Same-facility revenue per equivalent admission rose 3.1%, and that is the lever: a weak flu season and a January winter storm dented bodies through the door, and the income statement barely noticed.
That resilience comes from scale and network density. HCA runs the largest collection of acute-care hospitals in the United States, clustered in growing Sun Belt markets, and the concentration lets it negotiate harder with commercial payers and absorb fixed costs across more beds than any competitor. The company is candid in its filing that uninsured care is a real cost, noting it provides "discounts to uninsured patients who do not qualify" for charity care, but the commercial and managed-care payer mix carries the margin, and HCA's market positions in its metros give it leverage in those rate negotiations that a single-hospital system cannot match.
The capital engine compounds the per-share story. HCA generated free cash flow well above its reported earnings, and management returns nearly all of it: the company repurchased 26.739 million shares in 2025, part of a multi-year buyback that has pulled the share count down at roughly a 7% annual pace. Fewer shares against rising earnings is why per-share growth outruns the headline revenue line. For 2026 management reaffirmed revenue of $76.5 billion to $80.0 billion and diluted EPS of $29.10 to $31.50 on a base of 223.5 million shares, a guide that bakes in continued shrinkage of the count. A buyer is paying for a high-volume cash machine that turns flat traffic into rising earnings per share.
Bear Case
The way HCA deploys capital is the bear case, because the per-share growth that looks so clean is partly engineered with leverage. The company carries about $53 billion of net debt against roughly $9.4 billion of trailing operating income, a ratio near 5.6 times, and runs with negative book equity: years of debt-funded buybacks have returned more capital than the business retains. The filing lays out the scale of it, with senior unsecured notes alone running to "$43.250 billion aggregate principal amount of senior notes" across a ladder of maturities. Interest coverage near four times is adequate today, but it is the kind of structure that converts an operating wobble into an equity problem, because the debt holders are paid first and the equity is what is left.
That matters because the equity is also where the buybacks land. Returning nearly all free cash flow to shareholders while financing the balance sheet with $53 billion of borrowings is a choice that flatters earnings per share in good years and offers no cushion in bad ones. A hospital operator faces reimbursement risk from Medicare and Medicaid policy, the payer categories that headline its revenue mix, and from commercial-rate pressure; a single adverse shift in the rate environment compresses the operating margin that the entire leveraged structure rests on. The bull frames the buyback as disciplined capital return; the bear notes that buying back stock with borrowed money is most aggressive exactly when the operating environment is most benign, and 2026's soft volumes are a reminder that the environment does not stay benign.
The near-term operating signal is also softer than the headline. Same-facility admissions grew under 1% in Q1 2026, and the company acknowledged it "did not experience a typical seasonal volume increase" as respiratory admissions fell 42%. Volume is the raw material of a hospital, and HCA offset the shortfall with price this quarter; it cannot offset it with price indefinitely if utilization keeps drifting lower. The market already reacted, marking the stock down sharply after the print. A levered company priced for steady volume growth has little room for the volume line to keep disappointing.
Valuation
At about $375 (June 27, 2026) the market is paying roughly 15 times company-wide operating income, a multiple low enough that the price sits below what even a 5% annual decline in operating profit would warrant. That is an unusual setup: the inversion frames the price not as demanding heroic growth but as already discounting deterioration. The near-term pace HCA needs is within what it has recently delivered; the only stretch is in how long it must persist, not how fast.
The methods sort cleanly. The relative-multiple lens, anchored on a sector P/E near 18 times, lands close to the price, which is why the price reads as defensible on a peer basis. The earnings-power methods, which capitalize free cash flow, read the stock as expensive because they ignore growth entirely and value only the current cash stream at a flat rate. The absence of asset-value and book-based methods is not an oversight; HCA's negative book equity makes them inapplicable, which itself tells the valuation story. This is a company whose value lives in its cash generation and market position, not its balance sheet, and the cash-flow methods that strip out growth necessarily undershoot a business still growing earnings per share at double digits.
Solvency is where the caution belongs. Net debt of about $53 billion against operating income near $9.4 billion is roughly 5.6 times operating income, with interest coverage around four times. The company is not burning cash, and free cash flow comfortably services the debt, but this is a balance sheet built for steady operations rather than shocks. The share count falling about 7% a year is the clearest evidence of where management directs that cash, and it is the engine behind the per-share growth. What a holder underwrites at this price is straightforward: a dominant, cash-rich operator whose earnings per share keep rising, financed by a debt load that leaves little margin for a sustained downturn in volumes or reimbursement.
Catalysts
HCA's first quarter of 2026 set the recent tone: revenue up 4.3% year over year to $19.109 billion, net income attributable to HCA of $1.620 billion, and diluted EPS up 10.9% to $7.15. The cause behind the modest top line was volume: same-facility admissions rose only 0.9% and equivalent admissions 1.3%, with the company noting it did not get its usual seasonal lift because respiratory-related admissions fell 42% and respiratory ER visits 32% versus a year earlier, compounded by a January winter storm in several markets. Pricing carried the quarter, with same-facility revenue per equivalent admission up 3.1%. The stock fell about 9% on the print as investors focused on the soft volume rather than the price offset.
Capital return continued at pace. HCA repurchased 3.157 million shares for $1.571 billion in the quarter, leaving $9.179 billion under the current authorization. That buyback is the mechanism behind the per-share growth and the trajectory to watch alongside volume recovery.
Management reaffirmed full-year 2026 guidance: revenue of $76.5 billion to $80.0 billion, net income attributable to HCA of $6.495 billion to $7.035 billion, adjusted EBITDA of $15.550 billion to $16.450 billion, and diluted EPS of $29.10 to $31.50 on 223.5 million shares. The key forward variables are whether patient volumes normalize off the weak respiratory season and how the Medicare, Medicaid, and commercial reimbursement environment evolves through the year.
Peer Cohorts (Per Segment, With Filing Citations)
National Group / Atlantic Group / American Group (reported)
- THC (TENET HEALTHCARE CORP)
- FY2025 10-K: …party thereto (Incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K filed March 10, 2014) (d) Joinder Agreement, dated as of December 5, 2025, to the Guaranty, dated as of March 7, 2014, among Barclays Bank PLC, as administrative agent and the guarantors party thereto (e) Stock Pledge…
- FY2025 10-K: , 2023) 120 Table of Contents (k) Forty-First Supplemental Indenture, dated as of November 18, 2025, among the Registrant, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to 5.500% Senior Secured First Lien Notes Due 2032 (Incorporated by reference to Exhibit 4.2…
- UHS (UNIVERSAL HEALTH SERVICES, INC.)
- FY2025 10-K: …Indenture, dated as of June 23, 2022, among the Company, the Subsidiary Guarantors party thereto, U.S. Bank Trust Company and National Association (as successor to U.S. Bank National Association), as trustee to the indenture, dated as of September 21, 2020, previously filed as Exhibit 4.1 to the Company's Current…
- FY2025 10-K: 21, previously filed as Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q dated November 8, 2022, is incorporated herein by reference. 4.11 Indenture, dated as of September 26, 2024, among the Company, the Subsidiary Guarantors party thereto, U.S. Bank Trust Company, National Association, as trustee, and…
- SGRY (Surgery Partners, Inc.)
- FY2025 10-K: …the excess of the fair value of the consideration conveyed in the acquisition over the fair value of net assets acquired. Goodwill is reviewed for impairment at the reporting unit level, which is defined as one level below an operating segment or at the operating segment level, on an annual basis or sooner if the…
- FY2025 10-K: …Trust, National Association, as Trustee, including the Form of 7.250% Notes due 2032 attached thereto (incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed December 16, 2025). 10.1 Office Lease Agreement dated November 17, 2015 between Highwoods Realty Limited Partnership…
- EHC (Encompass Health Corporation)
- FY2025 10-K: 9, among Encompass Health Corporation, the Subsidiary Guarantors (as defined therein) and Computershare Trust Company, National Association, as trustee and successor in interest to The Bank of Nova Scotia Trust Company of New York (incorporated by reference to Exhibit 4.7.2 to Encompass Health's Annual Report on Form…
- FY2025 10-K: …guarantors party thereto and Computershare Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.2 to Encompass Health's Current Report on Form 8-K filed on March 12, 2015). 4.1.7 Sixth Supplemental Indenture, dated as of August 7, 2015, among Encompass Health Corporation, the…
- ARDT (Ardent Health, Inc.)
- FY2025 10-K: 025-01-01 2025-12-31 0001756655 ardt:SelfPayAndOtherMember us-gaap:ThirdPartyPayorMember us-gaap:ProductConcentrationRiskMember us-gaap:SalesRevenueNetMember 2024-01-01 2024-12-31 0001756655 ardt:SelfPayAndOtherMember us-gaap:ThirdPartyPayorMember us-gaap:ProductConcentrationRiskMember us-gaap:SalesRevenueNetMember…
- FY2025 10-K: …2025-12-31 0001756655 us-gaap:IPOMember 2024-07-19 2024-07-19 0001756655 us-gaap:IPOMember 2024-07-19 0001756655 us-gaap:OverAllotmentOptionMember 2024-07-19 2024-07-19 0001756655 us-gaap:OverAllotmentOptionMember 2024-07-30 2024-07-30 0001756655 us-gaap:OverAllotmentOptionMember 2024-07-30 0001756655…
- DVA (DAVITA INC.)
- FY2025 10-K: Fargo Bank, National Association, as administrative agent, collateral agent and swingline lender.(24) 10.5 Fourth Amendment, dated as of May 9, 2024, to that certain Credit Agreement, dated as of August 12, 2019, by and among DaVita Inc., certain subsidiary guarantors party thereto, the lenders party thereto, and…
- FY2025 10-K: …us-gaap:OtherNoncurrentAssetsMember 2025-12-31 0000927066 us-gaap:InterestRateCapMember us-gaap:OtherNoncurrentAssetsMember 2024-12-31 0000927066 dva:OperatingLeaseMember 2025-01-01 2025-12-31 0000927066 dva:OperatingLeaseMember 2024-01-01 2024-12-31 0000927066 dva:OperatingLeaseMember 2023-01-01 2023-12-31…
- FMS (FRESENIUS MEDICAL CARE AG)
- FY2025 20-F: …and Fresenius Medical Care Holdings, Inc., as Guarantors (1) , and U.S. Bank National Association, as Trustee, related to the 3.750% Notes due 2029 of Fresenius Medical Care US Finance III, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant's report on Form 6-K for the month of July 2019, furnished…
- FY2025 20-F: …interests without loss of control - - - - 8,722 - - - - - 8,722 ( 14,684 ) ( 5,962 ) Noncontrolling interests due to changes in consolidation group - - - - - - - - - - - ( 182,488 ) ( 182,488 ) Contributions from/ to noncontrolling interests - - - - - - …
- BTSG (BrightSpring Health Services, Inc.)
- FY2025 10-K: …us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2023-01-01 2023-12-31 0001865782 btsg:MaturedContractsMember btsg:MorganStanleyMember 2024-12-31 0001865782 btsg:CreditAgricoleCorporateAndInvestmentBankMember btsg:ExistingContractsInterestRateSwapAgreementsMember 2025-01-01 2025-12-31 0001865782…
- FY2025 10-K: …indenture referred to therein. 8-K 001-41938 4.1 1/30/2024 4.2 Form of Unit (included in Exhibit 4.1). 8-K 001-41938 4.2 1/30/2024 4.3 Form of Purchase Contract (included in Exhibit 4.1). 8-K 001-41938 4.3 1/30/2024 4.4 Indenture, dated as of January 30, 2024, between BrightSpring Health Services, Inc. and U.S. Bank…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
HCA Q1 2026 earnings release · HCA FY2025 10-K