Universal Health Services delivered first quarter results that missed Wall Street’s revenue expectations but exceeded profit forecasts, with management attributing the mixed outcome to strong expense controls and stable demand across its hospital segments. CFO Steve Filton noted that acute care revenues benefited from effective operating cost management and positive contributions from new facilities like West Henderson Hospital. However, same-facility behavioral health patient days were flat, as winter weather and the leap year impacted volumes early in the quarter. Management acknowledged that cash flow was impacted by delayed Medicaid supplemental payments, but emphasized that these timing issues do not reflect underlying business health.
Is now the time to buy UHS? Find out in our full research report (it’s free).
Universal Health Services (UHS) Q1 CY2025 Highlights:
- Revenue: $4.1 billion vs analyst estimates of $4.15 billion (6.7% year-on-year growth, 1.2% miss)
- Adjusted EBITDA: $603.2 million vs analyst estimates of $569 million (14.7% margin, 6% beat)
- Operating Margin: 11.1%, in line with the same quarter last year
- Same-Store Sales rose 2.4% year on year (4.5% in the same quarter last year)
- Market Capitalization: $11.06 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Universal Health Services’s Q1 Earnings Call
- Justin Lake (Wolfe Research) asked about the cadence of behavioral health volume recovery after winter disruptions. CFO Steve Filton replied that March showed improvement and full-year targets remain achievable if trends continue.
- Sarah James (Cantor Fitzgerald) inquired about the timing and scale of Nevada’s Medicaid payments. Filton clarified that the Q1 payment was for the first quarter only, and future receipts will depend on regulatory approvals.
- Andrew Mok (Barclays) questioned the impact of potential tariffs on supply chain costs. Filton explained that most purchases are insulated from tariffs and the company is monitoring vendor practices but has not seen material pressure yet.
- Matthew Gillmor (KeyBanc Capital Markets) sought detail on expense management, especially labor costs. Filton reported premium labor costs have stabilized, and expense controls should remain sustainable barring unforeseen external pressures.
- Pito Chickering (Deutsche Bank) asked about improvements in supply cost leverage and whether Q1 results were due to patient mix or better management. Filton attributed results to both a higher mix of medical cases and ongoing supply chain optimization.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will watch (1) the pace of behavioral health volume recovery as weather and seasonal factors dissipate, (2) the approval and cash flow timing of Medicaid supplemental payment programs in key states like Tennessee and D.C., and (3) the impact of ongoing cost control initiatives on margins. Developments in healthcare policy and reimbursement rates will also be important to monitor.
Universal Health Services currently trades at $171.70, in line with $173.18 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
