Scion Asset Management’s Latest Moves and HCA Healthcare’s Financial Performance

Scion Asset Management, led by Dr. Michael J. Burry, has recently disclosed its 13F filing as of December 31, 2023. Among its notable holdings, the largest new buy is HCA Holdings (HCA). This move suggests a strategic investment decision by Scion Asset Management, signaling confidence in the future growth prospects of HCA Healthcare.

HCA Healthcare’s Strong Q4 2023 Financial Results

On January 30, 2024, HCA Healthcare reported its fourth-quarter earnings, surpassing analyst expectations. The company announced earnings per shareEarnings per share (EPS) is a fundamental financial metric that provides valuable insights into a company's profitability. This widely used indicator helps investors and analysts g... More (EPS) of $5.93, significantly higher than the consensus forecast of $5.06. Additionally, HCA Healthcare reported fourth-quarter revenue of $17.3 billion, surpassing the consensus estimate of $16.51 billion. Notably, same facility admissions increased by 3.1%, indicating strong demand for the company’s services across various markets and service lines.

Sam Hazen, CEO of HCA Healthcare, attributed the solid financial performance to robust demand for services and improved cost trends. He expressed gratitude to the company’s employees for their dedication in delivering positive outcomes for patients and stakeholders.

Analyst Outlook and Price Target Adjustments

Following HCA Healthcare’s impressive fourth-quarter results, several analysts revised their price targets for the company:

Citi Raises Price Target to $357

Citi raised its price target on HCA Healthcare to $357 from $309, maintaining a Buy rating on the shares. The firm cited HCA’s Q4 EBITDA “beat by a healthy margin” as the reason behind the target adjustment. Despite potential pushback on valuation concerns, Citi remains optimistic about HCA’s momentum carrying through.

Wells Fargo Adjusts Price Target to $303

Wells Fargo increased its price target on HCA Healthcare to $303 from $291, while maintaining an Equal Weight rating on the shares. Despite core Q4 results meeting expectations, Wells Fargo noted that HCA’s strong 2024 guidance was well-received.

Mizuho Sets Price Target at $345

Mizuho raised its price target on HCA Healthcare to $345 from $310, with a Buy rating on the shares. The firm emphasized HCA’s favorable positioning for revenue and EBITDA growth in 2024, driven by solid demand and improved managed care yield due to regulatory changes.

Financial Performance and Valuation Metrics

HCA Healthcare boasts impressive financial metrics, including:

• Profit MarginIn the dynamic world of business, profitability is a fundamental metric that encapsulates a company's ability to generate earnings from its operations. Profit margins, expressed as... More: HCA’s profit margin of 8.07% ranks among the best in the industry, outperforming 91.23% of its peers.
• Operating MarginThe operating margin is a critical financial metric that measures a company's ability to generate profit through its core operations. It provides valuable insights into a company's... More: With an operating margin of 14.82%, HCA outperforms 93.86% of its industry peers.
• Gross MarginGross margin is a critical financial metric that plays a pivotal role in evaluating a company's financial health and profitability. It is a percentage that indicates how efficientl... More: HCA’s gross margin of 84.76% is among the industry’s best, outperforming 97.37% of its peers.
• Earnings Per Share Growth: HCA has demonstrated strong growth in EPS, with a yearly increase of 10.24% and a 5-year growth rate of 13.78%.
• Revenue Growth: While HCA’s revenue growth has been moderate, with a 7.86% increase in the past year and an average 5-year growth rate of 6.84%, the company’s stable financial performance is commendable.
• Valuation Metrics: HCA’s price/earnings ratio and price/forward earnings ratio indicate that the company is valued relatively cheaper compared to its industry peers and the S&P500 index.

In summary, Scion Asset Management’s investment in HCA Holdings reflects optimism in the company’s future prospects. With strong financial performance and positive analyst outlook, HCA Healthcare continues to be a noteworthy player in the healthcare industry.