Cash Machine Trading Cheap – Ardent Health Stock Set to Run?
We think Ardent Health (ARDT) stock is worth a look: It is growing, producing cash, and available at a significant valuation discount. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market.
What Is Happening With ARDT
ARDT may be up 4.3% so far this year but is still available at a significant discount to its 3-month, 1-year, and 2-year highs. This can be attributed to Q3 2025 revenue adjustments for collectability and increased liability reserves. Higher payer denials also led to reduced 2025 guidance.
The stock may not reflect it yet, but here is what’s going well for the company: Ardent Health reports growing patient admissions and urgent care acquisitions. Solid operating cash flow, low 0.72 debt-to-equity, and a $50 million share repurchase signal strength.
ARDT Has Strong Fundamentals
- Cash Yield: Ardent Health offers an impressive cash flow yield of 12.1%.
- Growing: Revenue growth of 10.9% over the last twelve months means that the cash pile is going to grow.
- Valuation Discount: ARDT stock is currently trading at 39% below its 3-month high, 44% below its 1-year high, and 54% below its 2-year high.
Below is a quick comparison of ARDT fundamentals with S&P medians.
| ARDT | S&P Median | |
|---|---|---|
| Sector | Health Care | – |
| Industry | Health Care Facilities | – |
| Free Cash Flow Yield | 12.1% | 3.9% |
| Revenue Growth LTM | 10.9% | 6.2% |
| Operating Margin LTM | 6.0% | 18.8% |
| PS Ratio | 0.2 | 3.3 |
| PE Ratio | 6.3 | 24.2 |
| Discount vs 3-Month High | -39.4% | -4.2% |
| Discount vs 1-Year High | -43.9% | -8.8% |
| Discount vs 2-Year High | -54.4% | -11.8% |
*LTM: Last Twelve Months
But What About The Risk Involved?
While ARDT stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. ARDT fell 70% in the Dot-Com crash, nearly 65% during the 2008 financial crisis, and about 55% amid the 2022 market sell-off. Even the milder pullbacks in 2018 and early 2020 pushed it down more than 20%. The company looks solid on paper, but these numbers show it’s far from immune when markets turn sour.
Other Stocks Like ARDT
Not ready to act on ARDT? You could consider these alternatives:
We chose these stocks using the following criteria:
- Greater than $2 Bil in market cap
- Positive revenue growth
- High free cash flow yield
- Meaningful discount to 3M, 1Y, and 2Y highs
A portfolio that was built starting 12/31/2016 with stocks that fulfil the criteria above would have performed as follows:
- Average 6-month and 12-month forward returns of 25.7% and 57.9% respectively
- Win rate (percentage of picks returning positive) of >70% for both 6-month and 12-month periods
The Right Way To Invest Is Through Portfolios
Individual stocks are unpredictable. A smart portfolio keeps you invested, limits downside shocks, and provides upside exposure
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.