Investment Thesis
HCA Healthcare generates solid revenue growth (7.1% YoY) and positive operating cash flow ($2.0B), demonstrating viable healthcare operations. However, the company's financial structure is severely impaired with negative stockholders' equity (-$6.3B) and extreme leverage ($44.4B debt), combined with deteriorating net income (-12.8% YoY) despite revenue growth, signaling operational headwinds masking balance sheet distress.
Strengths
- Solid revenue growth of 7.1% YoY in competitive healthcare sector
- Positive operating and free cash flow generation ($2.0B and $895M respectively)
- Reasonable operating margin of 12% demonstrates core business profitability
Risks
- Negative stockholders' equity (-$6.3B) indicates severe overleveraged balance sheet structure
- Extremely high debt burden ($44.4B) with tight 3.9x interest coverage limiting financial flexibility
- Net income declining 12.8% despite revenue growth plus liquidity strain (current ratio 0.83x, quick ratio 0.75x)
Key Metrics to Watch
- Debt reduction trajectory and refinancing risk given leverage levels
- Net income reversal and margin expansion trend reversal
- Free cash flow sufficiency relative to debt service and capital requirements
Financial Metrics
Revenue
19.1B
Net Income
1.6B
EPS (Diluted)
$7.15
Free Cash Flow
895.0M
Total Assets
61.5B
Cash
940.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
12.0%
Net Margin
8.5%
ROE
N/A
ROA
2.6%
FCF Margin
4.7%
Balance Sheet & Liquidity
Current Ratio
0.83x
Quick Ratio
0.75x
Debt/Equity
N/A
Debt/Assets
74.2%
Interest Coverage
3.92x
Long-term Debt
44.4B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T12:07:50.664103 |
Data as of: 2026-03-31 |
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