Ardent Health Stock To $12?
Ardent Health (ARDT) stock has fallen 34% during the past day, and is currently trading at $9.30. Our multi-factor assessment suggests that it may be time to buy more shares of ARDT stock. We have, overall, a positive view of the stock, and a price of $12 may not be out of reach. We believe there is a near-equal mix of good and bad in ARDT stock given its overall Moderate operating performance and financial condition. Taken together with its Very Low valuation, this makes the stock look Attractive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very Low |
| What you get: | |
| Growth | Strong |
| Profitability | Very Weak |
| Financial Stability | Moderate |
| Downturn Resilience | N/A |
| Operating Performance | Moderate |
| Stock Opinion | Attractive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $1.3 Bil in market cap, Ardent Health is the fourth largest privately held, for-profit hospital operator and a leading provider of healthcare services in the United States, established in 2015.
[1] Valuation Looks Very Low
| ARDT | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 0.2 | 3.2 |
| Price-to-Earnings Ratio | 5.1 | 23.6 |
| Price-to-Free Cash Flow Ratio | 12.1 | 20.4 |
This table highlights how ARDT is valued vs broader market. For more details see: ARDT Valuation Ratios
[2] Growth Is Strong
- Ardent Health has seen its top line grow at an average rate of 18.7% over the last 3 years
- Its revenues have grown 10% from $5.6 Bil to $6.2 Bil in the last 12 months
- Also, its quarterly revenues grew 11.9% to $1.6 Bil in the most recent quarter from $1.5 Bil a year ago.
| ARDT | S&P 500 | |
|---|---|---|
| 3-Year Average | 18.7% | 5.5% |
| Latest Twelve Months* | 10.0% | 6.1% |
| Most Recent Quarter (YoY)* | 11.9% | 7.1% |
This table highlights how ARDT is growing vs broader market. For more details see: ARDT Revenue Comparison
[3] Profitability Appears Very Weak
- ARDT last 12 month operating income was $432 Mil representing operating margin of 7.0%
- With cash flow margin of 4.9%, it generated nearly $302 Mil in operating cash flow over this period
- For the same period, ARDT generated nearly $255 Mil in net income, suggesting net margin of about 4.1%
| ARDT | S&P 500 | |
|---|---|---|
| Current Operating Margin | 7.0% | 18.8% |
| Current OCF Margin | 4.9% | 20.5% |
| Current Net Income Margin | 4.1% | 13.1% |
This table highlights how ARDT profitability vs broader market. For more details see: ARDT Operating Income Comparison
[4] Financial Stability Looks Moderate
- ARDT Debt was $2.3 Bil at the end of the most recent quarter, while its current Market Cap is $1.3 Bil. This implies Debt-to-Equity Ratio of 173.4%
- ARDT Cash (including cash equivalents) makes up $541 Mil of $5.0 Bil in total Assets. This yields a Cash-to-Assets Ratio of 10.8%
| ARDT | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 173.4% | 20.9% |
| Current Cash-to-Assets Ratio | 10.8% | 7.0% |
[5] Downturn Resilience Is N/A
ARDT has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
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