HCA Healthcare, Inc. (HCA)

Conclusion

HCA Healthcare operates hospitals, outpatient surgery and imaging centres, emergency and urgent care facilities, and home health and hospice services, mainly in the United States. At a share price of 504.89 USD on 2026-11-09, the market capitalisation is 105.5 billion USD and the enterprise value is 157.0 billion USD.

The verdict is fair. The fair value band runs from 349.13 to 523.70 USD, with a midpoint of 436.42 USD and a margin of safety of -13.6% at the current price, so the price sits above the midpoint. The DCF gives 435.27 USD per share at a discount rate of 10.4%, and the fair value from historical multiples is 437.56 USD. Today's multiples are above their ten-year medians: P/E 15.6 against 14.5, EV/EBITDA 9.9 against 8.9, and P/FCF 17.7 against 15.0. The reverse DCF implies growth of 7.7% a year, against revenue growth of 8.0% over five years and free cash flow per share growth of 12.5% over five years.

The case rests on a return on invested capital of 22.2% against a WACC of 8.2%, free cash flow conversion of 88.2% over the last twelve months, and a Piotroski score of 7 out of 9. The weakest numbers are net debt to EBITDA of 3.24, interest coverage of 5.15, and a current ratio of 0.82. Next year's EPS estimate has also been revised down by 2.7% over ninety days. If earnings slow or leverage rises, the premium multiples would have little cushion.

Financial health

Financial strength is yellow: the current ratio of 0.82, quick ratio of 0.63, net debt to EBITDA of 3.24 and interest coverage of 5.15 are all assessed neutral. Debt to equity is not available because the company has negative equity. The Altman Z-score is 2.56, in the grey zone. The Altman model was designed for manufacturers, so it fits a hospital operator only loosely. Insolvency risk: low, about 1.0% by the estimate of the Ohlson model over one to two years.

Earnings quality

Earnings quality is green, held up by a Piotroski score of 7 out of 9, a Beneish M-score of -2.66 that reads as unlikely manipulation, and free cash flow conversion of 88.2% over the last twelve months and 90.6% over five years. The accrual ratio is -9.7%. Stock-based compensation is 0.5% of revenue, and free cash flow after it is 5.57 billion USD. The share count has fallen at a compound rate of 7.8% over five years, which reflects buybacks. HCA beat earnings estimates in all 8 of the last quarters, with an average surprise of 7.2%. Estimate revisions are mixed: the current year rose 2.1% over ninety days, while next year fell 2.7%, with three downgrades in the last thirty days.

Profitability

Profitability is green. The operating margin of 15.3% compares with a ten-year median of 14.9%, and the net margin of 8.6% with a median of 8.1%. The gross margin is 21.7% against a median of 62.4%. The margin stability measure is 5.3%. Return on invested capital is 22.2% against a WACC of 8.2%, with the given ROIC minus WACC value at 13.9%. The five-year median ROIC is 20.8%. Return on equity is not available because equity is negative, so a DuPont split cannot be reported. For 2025, the DuPont components are a net margin of 9.0% and an asset turnover of 1.25x.

Growth

Growth is green, driven mainly by earnings per share. Revenue compound growth is 7.9% over three years, 8.0% over five and 6.7% over ten. EPS compound growth is 15.4% over three years, 22.0% over five and 19.4% over ten. Free cash flow per share grew at compound rates of 33.5%, 12.5% and 19.7% over the same periods. Revenue grew in 10 of the 10 comparable years. The next-year EPS growth estimate is 3.7%, a slower pace than the five-year record.

Valuation

Valuation is yellow, with a verdict of fair and a margin of safety of -13.6%. Current multiples sit above their ten-year medians: P/E 15.6 against 14.5, a premium of 7.0%; EV/EBITDA 9.9 against 8.9, a premium of 11.0%; P/FCF 17.7 against 15.0, a premium of 17.6%; and P/S 1.34 against 1.18, a premium of 13.5%. The ten-year median for P/B is not available. The DCF gives 435.27 USD per share at a discount rate of 10.38%, with the terminal value making up 50.2% of it. The reverse DCF implies growth of 7.7%. The dividend yield is 0.65% and the payout is 11.4% of free cash flow. The fair value band rests on fixed assumptions and is not a price target.

Risks

The main risk is leverage. Net debt to EBITDA of 3.24 means that a fall in earnings would weigh more heavily on the balance sheet. Interest coverage of 5.15 leaves less room if operating profit declines. The current ratio of 0.82 and quick ratio of 0.63 show that short-term obligations are not fully covered by liquid assets. Negative equity means return on equity and debt to equity are not available. The ten-year median for P/B and the current P/B are also not available. The analysis has limits: it has no debt maturity schedule and no revenue split by segment, so refinancing needs and the mix of business cannot be assessed.