Universal Health Services (UHS) is a leading healthcare facilities company with a market cap of $9.6 billion. It trades at a P/E ratio of just 6.6, remarkably low for a profitable healthcare operator.
UHS reported strong Q3 2025 results, beating consensus estimates. Adjusted EBITDA reached approximately $634 million, a 9% beat. EBITDA margin expanded 160 bps to 14.9%.
The acute care segment was a key driver. Same-store adjusted EBITDA grew 43% YoY to $428.3 million, with a margin of 17.6%.
The behavioral health segment saw 11% YoY growth in same-store adjusted EBITDA to $404.5 million, with a margin of 22.3%. Revenue per adjusted patient day increased 7.9%.
In January 2026, UHS management stated that the New York Medicaid policy change would have an immaterial financial impact. Analysts corroborated this assessment.
UHS raised FY2025 guidance: revenue up 1%, adjusted EBITDA up 4%, and EPS up 6%. Analysts project EPS of 21.86 for FY2026 and 22.99 for FY2027.
In October 2025, UHS increased its share repurchase authorization by $1.5 billion to a total of $1.759 billion. Free cash flow declined 22% YoY, but the company maintains strong cash generation.
Potential risks include expiration of enhanced premium tax credits, changes to behavioral health reimbursement, and the temporary nature of direct provider payments.
Overall, UHS demonstrates solid operational performance and capital return, but policy changes need careful monitoring.
