UHS

Healthcare

Universal Health Services

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2010–2025(16yr)

Revenue

Net Income

Free CF

Metric	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$5.6B	$7.5B	$7.0B	$7.3B	$8.1B	$9.0B	$9.8B	$10.4B	$10.8B	$11.4B	$11.6B	$12.6B	$13.4B	$14.3B	$15.8B	$17.4B	+9.7%
Operating Income	$505.7M	$897.1M	$942.6M	$1.0B	$1.1B	$1.3B	$1.3B	$1.3B	$1.2B	$1.2B	$1.4B	$1.4B	$1.0B	$1.2B	$1.7B	$2.0B	+18.6%
Operating Margin	9.1%	12.0%	13.5%	13.9%	13.2%	13.9%	13.1%	12.3%	10.9%	10.7%	11.8%	10.8%	7.5%	8.2%	10.6%	11.5%	+0.9pp
Net Income	$230.2M	$398.2M	$443.4M	$510.7M	$545.3M	$680.5M	$702.4M	$752.3M	$779.7M	$814.9M	$944.0M	$991.6M	$675.6M	$717.8M	$1.1B	$1.5B	+30.4%
Net Margin	4.1%	5.3%	6.4%	7.0%	6.8%	7.5%	7.2%	7.2%	7.2%	7.2%	8.2%	7.8%	5.0%	5.0%	7.2%	8.6%	+1.4pp
Free Cash Flow	$262.1M	$432.6M	$452.1M	$525.7M	$644.7M	$641.6M	$768.5M	$625.1M	$675.9M	$804.4M	$1.6B	$28.0M	$262.0M	$524.7M	$1.1B	$849.2M	-24.4%
FCF Margin	4.7%	5.8%	6.5%	7.2%	8.0%	7.1%	7.9%	6.0%	6.3%	7.1%	14.1%	0.2%	2.0%	3.7%	7.1%	4.9%	-2.2pp
EPS (Diluted)	$2.34	$4.04	$4.53	$5.14	$5.42	$6.76	$7.14	$7.81	$8.31	$9.13	$10.99	$11.82	$9.14	$10.23	$16.82	$23.10	+37.3%

Total Debt$4.8B

Cash & Equiv.$137.8M

Net Debt$4.6B

4 min read

1. THE BIG PICTURE

Universal Health Services is a high-margin specialist operating in the shadow of diversified healthcare giants, generating superior returns through a concentrated portfolio of acute care and behavioral health facilities. While Universal Health Services leads its peer group in operating and net margins, its valuation remains depressed by significant legislative threats to Medicaid funding and a heavy reliance on just three states for the majority of its operating income.

2. WHERE THE RISKS HIT HARDEST

The strategy of "rational growth" through facility acquisitions is increasingly threatened by "significant CON reforms" and heightened governmental review, which could stall Universal Health Services's primary expansion lever (Competitive Position). Furthermore, Universal Health Services's "Operational Control" strength is fragile due to extreme geographic concentration: facilities in Texas, Nevada, and California generate 53% of operating income (Risks). A single regulatory shift or severe weather event in these regions would disproportionately erode the very financial controls Universal Health Services cites as a competitive advantage. Finally, the "Provider Networks" advantage faces a direct hit from labor volatility; management notes that while inflationary pressures have "moderated," the legal inability to pass these costs to Medicare and Medicaid patients forces a reliance on aggressive negotiations with commercial insurers (Recent Results).

3. WHAT THE NUMBERS SAY TOGETHER

Universal Health Services presents a paradox of high operational efficiency paired with volume stagnation in its largest segment. While total revenue grew 9.1% in the most recent quarter, the Acute Care segment relied entirely on pricing power—net revenue per admission rose 5.4% while adjusted patient days actually declined by 0.7% (Recent Results). In contrast, Behavioral Health is a more balanced growth engine, seeing both admissions and pricing rise concurrently.

Universal Health Services’s financial health is a standout in the sector. Universal Health Services maintains an 11% operating margin and a 7.7% net margin, both of which rank first among its peer group (XBRL). It also leads the group in Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin at 3.8%. However, this cash generation is being tempered by the "increase in interest rates during the past few years," which management admits has significantly increased interest expense and limited access to capital markets (10-Q). Short interest stands at 5.2% of the float, suggesting that a portion of the market remains skeptical of Universal Health Services's ability to maintain these margins as Medicaid subsidies face a $432 million to $480 million annual reduction by 2032 (Risks).

4. IS IT WORTH IT AT THIS PRICE?

At a forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 7.3x, Universal Health Services is the cheapest stock in its peer group, trading at a significant discount to the peer median of 9.6x (Peer Benchmarking). This valuation is particularly striking given that Universal Health Services’s 9.7% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth outpaces several larger peers like CVS and Cardinal Health.

According to market-implied data, the current price assumes a long-term growth rate of just 0.5% (CAPM analysis). This appears to be an attractively valued entry point, as Universal Health Services's actual fundamentals—specifically its sector-leading 11% operating margin—suggest a business of higher quality than its multiple implies. However, for this price to be "right," investors must believe that the $480 million Medicaid funding cliff and ongoing litigation, such as the $500 million Nevada punitive damage award, are structural impairments rather than manageable hurdles. If Universal Health Services can achieve even a modest 2.5% long-term growth rate, the justified multiple would rise to 11.2x (CAPM analysis).

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if Acute Care patient days return to positive growth, proving Universal Health Services can expand volume rather than just relying on price increases.
Cautious if the "One Big Beautiful Budget Act" impact exceeds the estimated $480 million annual reduction or if the Nevada litigation results in a settlement significantly higher than the expected $14 million reduction.

6. BOTTOM LINE

Structural Advantage: A high-margin mix of behavioral and acute care services supported by centralized operational and financial controls. Bottom Line: Universal Health Services is an attractively valued specialist that the market is pricing for near-zero growth despite its sector-leading profitability.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Geographic Concentration: Universal Health Services derives 44% of its consolidated net revenues from facilities in Texas, Nevada, and California. These states accounted for 53% of Universal Health Services's income from operations (after noncontrolling interest) in 2025. Disruptions from severe weather, such as wildfires in California, or regulatory changes in these specific states could disproportionately impact overall results.
Medicaid Funding Reductions: The One Big Beautiful Budget Act of 2025 limits Medicaid enrollment and provider fees. Universal Health Services estimates this will reduce its aggregate annual net benefit by $432 million to $480 million by 2032. Additionally, the expiration of enhanced premium tax credits on December 31, 2025, is expected to adversely impact exchange enrollment.
Litigation Exposure: Universal Health Services faces ongoing multi-plaintiff litigation, including the "Cumberland Litigation" and a Nevada-based lawsuit involving Pinnacle Medical Group. Adverse verdicts, such as the $500 million punitive damage award in Nevada (expected to be reduced to $14 million) and the Cumberland verdict, create uncertainty regarding ultimate financial exposure and potential settlement costs.
Labor Costs and Staffing: Universal Health Services faces a nationwide shortage of nurses and clinical staff, which has forced the use of higher-cost temporary labor. In California, mandatory nurse-staffing ratios and new standards for acute psychiatric hospitals (effective June 2026) threaten to increase salary and benefit expenses or force limits on patient admissions.
Managed Care Reimbursement Pressure: Private payers and managed care organizations are increasingly demanding lower payment rates. Universal Health Services expects government pressure on Medicare Advantage plans to result in static or reduced funding, which in turn increases pressure on Universal Health Services to lower or freeze rates charged to patients covered by those plans.

2. Company-Specific Risks

Concentrated Voting Control: Alan B. Miller and his family control a majority of the Class A and Class C Common Stock, which grants them 90.8% of the general voting power as of March 17, 2025. This concentration allows them to elect a majority of the Board of Directors and reject potential change-of-control transactions that might otherwise be beneficial to other shareholders.
District Hospitals Transition: The pending 2026 transition of the George Washington University Hospital and Cedar Hill Regional Medical Center involves a new physician employment model. If the transaction fails or anticipated benefits are not realized, the financial performance of these facilities could be materially adversely impacted.
Goodwill Impairment: As of December 31, 2025, Universal Health Services held approximately $4.0 billion in goodwill. Worsening economic conditions or rising unemployment could lead to impairment charges if patient volumes and reimbursement rates at acute care or behavioral health facilities decline.
Refinancing Risk: The $700 million, 1.65% senior notes maturing on September 1, 2026, will likely be refinanced at significantly higher interest rates, which will increase interest expense and decrease net income attributable to Universal Health Services.

3. Regulatory/Legal Risks

Anti-Kickback and Stark Law: Universal Health Services maintains various financial relationships with physicians, including employment contracts and revenue guarantees. Failure to meet "safe harbor" regulations under the Anti-Kickback Statute or violations of the Stark Law could result in civil or criminal penalties, including exclusion from Medicare and Medicaid programs.
Price Transparency Requirements: Under the No Surprises Act and CMS rules, Universal Health Services must publish standard charges and payer-specific negotiated rates. Noncompliance can result in daily monetary penalties and potential loss of patient volume if standard charges are perceived as higher than competitors.
EMTALA Obligations: The Emergency Medical Treatment and Active Labor Act requires Universal Health Services to provide medical screening and stabilization to any individual regardless of ability to pay. Increased indigent care volume or expanded regulatory obligations under EMTALA could harm operating results.
Foreign Regulatory Environment: Operations in the United Kingdom are subject to the UK Bribery Act and strict data protection laws (UK GDPR). Failure to comply with these or other foreign regulations could lead to substantial penalties and operational disruptions.

4. Financial Impact Map

Geographic Concentration → Income from Operations → 53% of income generated from Texas, Nevada, and California in 2025. Medicaid Funding Reductions → Net Benefit → $432 million to $480 million annual reduction by 2032. Litigation Exposure → Cash and Capital Resources → Potential for material settlement payments and the requirement to post large bonds during appeals. Labor Costs → Salaries, Wages, and Benefits Expense → Increased costs from temporary labor and mandatory staffing ratios in California. Refinancing Risk → Interest Expense → Expected increase in interest expense due to higher rates on 2026 Notes maturity.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Feb 2026	—
10-K	Feb 2026	Dec 2025
10-Q	Nov 2025	Sep 2025
14A	Apr 2025	—