For Immediate Release
Chicago, IL – June 29, 2026 – Today, Zacks Equity Research discusses Tenet Healthcare Corp. THC, Universal Health Services, Inc. UHS, Acadia Healthcare Company, Inc. ACHC and Community Health Systems, Inc. CYH.
Industry: Hospitals
The Zacks Medical-Hospital industry is undergoing a structural transformation as patients and payers increasingly shift toward lower-cost care settings outside traditional hospitals. As a result, the fastest growth is coming from ambulatory surgery centers, home health and post-acute care providers. Meanwhile, hospitals continue to contend with elevated patient utilization, persistent labor and supply cost inflation, and reimbursement and regulatory uncertainty.
To protect margins, providers are accelerating investments in AI, revenue cycle management and digital technologies, while streamlining operations and expanding outpatient care networks.
Strategic mergers and acquisitions also remain an important growth lever to expand scale, improve efficiency and strengthen market presence. Companies like Tenet Healthcare Corp., Universal Health Services, Inc., Acadia Healthcare Company, Inc. and Community Health Systems, Inc. are streamlining operations, strengthening cost discipline and investing in higher-growth service lines.
Industry Overview
The Zacks Medical-Hospital industry comprises for-profit hospital companies that provide healthcare through different types of hospitals, including acute care, outpatient, rehabilitation and psychiatric. These entities are engaged in internal medicine, general surgery, cardiology, oncology, neurosurgery, orthopedics and obstetrics, telehealth, mental health and diagnostic and emergency services.
Revenues of these companies depend on inpatient occupancy, medical and ancillary services ordered by physicians and provided to patients, and the volume of ambulatory surgery centers' (ASC) procedures. These companies receive payments for patient services from the government under the Medicare program, Medicaid, or similar programs, managed care plans (including plans offered through the American Health Benefit Exchanges), private insurers and directly from patients.
4 Key Trends Shaping the Hospital Industry
Demand Grows as Care Moves Beyond Hospitals: Demand for healthcare continues to rise, supported by an aging U.S. population, increasing chronic disease prevalence and higher use of elective procedures. CMS projects national health spending to climb steadily and reach around $9 trillion by 2034, making up 20.6% of the economy. Meanwhile, care is shifting away from traditional inpatient hospitals toward ambulatory surgery centers, outpatient clinics, home health and virtual care. Lower-cost settings are becoming more attractive for patients and payers, prompting hospital systems to expand outpatient networks, strengthen physician partnerships and invest in home-based services to meet changing demand while improving asset utilization.
Margin Pressure Keeps Efficiency in Focus: Hospitals continue to face elevated labor, supply and pharmaceutical costs, even as contract staffing expenses ease from pandemic highs. Reimbursement growth has generally lagged cost inflation, keeping pressure on operating margins. Additionally, emerging cyber risks are pushing up insurance premiums and compliance costs, adding further pressure across the system. In response, providers are tightening cost controls, improving workforce productivity and automating administrative tasks. Many are also using data analytics to optimize staffing, purchasing and patient flow.
Technology Becomes a Competitive Advantage: Artificial intelligence is moving beyond pilot programs and becoming part of everyday hospital operations. It is increasingly improving revenue cycle management, prior authorization workflows and clinical documentation, helping providers accelerate collections and reduce administrative workload. Digital tools are also strengthening patient engagement through online scheduling, remote monitoring and virtual follow-up care. Telehealth remains an important part of care delivery, particularly for rural communities and patients with chronic conditions, allowing hospitals to extend services beyond their physical campuses while improving continuity of care.
Strategic Expansion Strengthens Market Position: Hospitals continue to pursue mergers, acquisitions and strategic partnerships to improve scale, expand specialty services and strengthen financial stability. While regulatory scrutiny has slowed some large hospital mergers, providers remain active in acquiring physician practices, outpatient facilities and complementary care businesses. These investments broaden referral networks, support the shift toward lower-cost care settings and create opportunities for greater operating efficiency. Larger health systems are also investing in digital infrastructure and outpatient capacity, positioning themselves to compete more effectively as healthcare delivery continues to evolve.
Zacks Industry Rank Indicates Positive Outlook
The group's Zacks Industry Rank, which is the average of the Zacks Rank of all member stocks, signals promising near-term prospects. The Zacks Medical-Hospital industry, which is housed within the broader Zacks Medical sector, currently carries a Zacks Industry Rank #107, which places it in the top 43% of nearly 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.
Looking at the aggregate earnings estimate revisions, it appears that analysts are becoming optimistic about this group's earnings growth potential. As a matter of fact, the industry's earnings estimates for 2026 have gone up by 5.7% over the past year.
Considering the encouraging dynamics of the industry, we will present a few stocks that should be on your watchlist. But it's worth taking a look at the industry's shareholder returns and current valuation first.
Industry Lags Sector and S&P 500
The Zacks Medical-Hospital industry has fared worse than the broader Zacks Medical sector and the Zacks S&P 500 Composite over the past year, pressured by concerns over reimbursement, healthcare policy uncertainty and a shift in investor preference toward higher-growth technology and AI stocks.
The industry has declined 6.9% over the past year compared with a 6.9% gain for the broader sector and a 22.5% advance for the S&P 500.
Industry's Current Valuation
Since hospital operators are capital-intensive businesses that require significant investment in facilities and equipment, it makes sense to value them based on the EV/EBITDA (Enterprise Value/ Earnings before Interest Tax Depreciation and Amortization) ratio. On the basis of the trailing 12-month EV/EBITDA ratio, the industry trades at 6.60X compared with the S&P 500's 18.23X and the sector's 9.94X.
Over the past five years, the industry has traded as high as 10.66X and as low as 6.34X, with a median of 8.33X.
4 Hospital Stocks to Watch
Tenet Healthcare: Based in Dallas, TX, the company operates acute care hospitals and is one of the nation's largest ambulatory care platforms. It continues to expand its Ambulatory Care segment through strategic acquisitions to capitalize on growing demand for outpatient procedures. The company is also benefiting from solid same-facility revenue growth, higher adjusted admissions and sustained momentum across its key service lines.
The Zacks Consensus Estimate for Tenet Healthcare's 2026 bottom line is pegged at $17.61 per share, up 5% year over year. The same for 2027 indicates further growth to $17.63 per share. It beat earnings estimates in each of the past four quarters, with an average surprise of 20.6%. The consensus mark for 2026 and 2027 revenues indicates 3.3% and 1.9% year-over-year growth, respectively. Shares of the company have gained 1.6% over the past month. It currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Universal Health Services: Headquartered in King of Prussia, PA, the company operates acute care hospitals, outpatient centers and one of the nation's largest behavioral health networks. Its services span internal medicine, autism care, addiction treatment and military-related healthcare. Growth is being driven by tuck-in acquisitions, rising patient days and admissions, facility expansion and partnerships that strengthen its behavioral health presence. UHS also maintains a shareholder-friendly capital allocation strategy, with regular buybacks and dividends, and had $1.298 billion remaining under its share repurchase authorization as of March 31, 2026.
The Zacks Consensus Estimate for Universal Health's 2026 and 2027 bottom line is pegged at $23.47 and $25.40 per share, up 8% and 8.2% year over year, respectively. It beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 9.5%. The consensus mark for 2026 and 2027 revenues indicates 6.8% and 5.1% year-over-year increases, respectively. While Universal Health shares have declined 6.4% over the past month, improving operations are expected to support a future rebound. It also currently has a Zacks Rank #3.
Acadia Healthcare: Based in Franklin, TN, it operates Acute Inpatient Psychiatric Facilities and Comprehensive Treatment Centers, which remain its core growth engines. Rising patient days, revenues per patient day, higher admissions and strong demand for mental health and substance use treatment continue to support steady long-term growth. ACHC's solid cash generation ability and meaningful real estate assets provide financial flexibility and downside support. Following operational challenges over the past year, management's strategic initiatives are expected to improve execution and support earnings recovery.
The Zacks Consensus Estimate for Acadia Healthcare's 2026 bottom line is pegged at $1.50 per share. The same for 2027 indicates a 14.8% year-over-year jump to $1.72 per share. It beat earnings estimates in each of the past four quarters, with an average surprise of 47.5%. The consensus mark for 2026 and 2027 revenues indicates 2.6% and 5.7% year-over-year growth, respectively. ACHC shares have gained 8.9% over the past month. It currently has a Zacks Rank #3.
Community Health Systems: Headquartered in Franklin, TN, it operates a network of acute care hospitals and outpatient centers. The company is benefiting from lower expenses, higher-acuity procedures, improving commercial payer mixand resilient same-store revenues. Management is also focusing on operational efficiency and selective partnerships to support growth. In parallel, CYH continues to divest non-core assets to sharpen its portfolio, reduce debt burden and improve long-term profitability, even though these moves could pressure results in the near term.
The Zacks Consensus Estimate for Community Health Systems' 2026 bottom line is pegged at a loss of 58 cents per share. The same for 2027 implies a 71.3% year-over-year improvement. The consensus mark for 2026 and 2027 revenues is pegged at $11.56 billion and $11.67 billion, respectively. Shares of Community Health Systems have jumped 15.9% in the past month. It currently has a Zacks Rank #3.
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Universal Health Services, Inc. (UHS): Free Stock Analysis Report
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