THC - Tenet Healthcare Corporation

Tenet Healthcare Corporation operates acute care hospitals, ambulatory surgery centers (ASCs) through its United Surgical Partners International (USPI) subsidiary, and Conifer Health Solutions revenue cycle management services. The core customer model is fee-for-service and managed care contracts with commercial insurers, Medicare, and Medicaid, serving patients across inpatient hospital stays and outpatient surgical procedures. Tenet generates approximately $20B in annual revenue, concentrated in the United States with significant presence in Texas, Florida, and other Sun Belt states. USPI, its high-margin ambulatory segment, operates over 500 ASCs and surgical hospitals in partnership with physician groups and health systems.

Past Year Trends

• Tenet Healthcare grew FY2025 consolidated adjusted EBITDA 14% year-over-year to $4.57 billion on net operating revenues of $21.3 billion, with Q4 2025 adjusted diluted EPS surging 36.6% to $4.70 driven by strong surgical volumes and cost discipline across its hospital segment. (Bullish)
• USPI (United Surgical Partners International) added 35 new ambulatory surgery center facilities in 2025, achieved same-facility revenue growth of 7.2%, and Tenet acquired controlling interests in 27 ASCs and one surgical hospital for approximately $339 million, accelerating the shift toward higher-margin outpatient care. (Bullish)
• Tenet repurchased 7.2 million shares for $1.095 billion in the first half of 2025 alone, and the Board authorized a further $1.5 billion increase to the repurchase program, leaving $1.781 billion in buyback capacity as of July 2025, reflecting aggressive capital return alongside refinancing of 2027–2028 debt at lower rates. (Bullish)

Next Year Trends

• The Conifer Health Solutions restructuring with CommonSpirit Health, effective January 1, 2026, will deliver approximately $1.9 billion in installment payments to Tenet over three years plus a $540 million equity redemption, providing a defined capital inflow earmarked for debt retirement and continued share buybacks through 2028. (Bullish)
• Federally enacted Medicaid cuts are projected to hit Tenet's hospital segment hardest beginning in 2027, as reduced Medicaid enrollment will increase uncompensated care volumes across its acute-care hospitals, with Seeking Alpha analysts flagging this as the single largest headwind threatening growth beyond the current fiscal year. (Bearish)
• Tenet's 2026 adjusted EBITDA guidance of $4.485–$4.785 billion implies flat-to-modest growth versus FY2025's $4.57 billion, constrained by the wind-down of Conifer's CommonSpirit service contract at end of 2026 and the need to sustain USPI same-facility revenue growth above 7% to offset hospital segment margin pressure from labor costs. (Neutral)

Red Flags

[Short Seller Report] Short seller report — Fuzzy Panda Research, June 2025: Fuzzy Panda published a report alleging Tenet Healthcare (THC) systematically inflated Medicare and Medicaid reimbursements by reallocating indirect corporate expenses to hospitals to game the outlier payment system, estimating potential fines of $675M–$845M. — Fuzzy Panda Research, fuzzypandaresearch.com; Yahoo Finance coverage, June 2025

[Securities Fraud / Investigation] Active DOJ lawsuit — U.S. Department of Justice, January 2025: The DOJ filed a $323 million civil lawsuit alleging Tenet submitted over 19,300 false Medicare claims worth approximately $115 million in improperly upcoded bills, conduct alleged to have occurred while the company was operating under a Corporate Integrity Agreement. — U.S. Department of Justice press release; Senate Finance Committee (Sen. Grassley) document request, 2025