Ardent Health Stock: Strong Cash Flow Poised for a Re-Rating?
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 0.8% 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 a Q3 2025 revenue reduction linked to accounting changes and a significant increase in professional liability reserves. Additionally, revised 2025 guidance reflected higher professional fees and increased payer denials.
The stock may not reflect it yet, but here is what’s going well for the company: Patient admissions grew 5.8% in Q3 2025, with total surgeries turning positive, indicating solid demand. Ardent Health generated strong operating cash flow of $154 million in Q3 2025, supported by operational efficiency initiatives like virtual nursing. Expansion continues into 2026 with new urgent care centers, while a low lease-adjusted net leverage of 2.5x and a $50 million share repurchase authorization highlight financial strength. Management is actively renegotiating contracts to offset industry headwinds.
ARDT Has Strong Fundamentals
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- Cash Yield: Ardent Health offers an impressive cash flow yield of 12.5%.
- 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 41% below its 3-month high, 42% below its 1-year high, and 56% 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 | 12.5% | 3.8% |
| Revenue Growth LTM | 10.9% | 6.4% |
| Operating Margin LTM | 6.0% | 18.8% |
| PS Ratio | 0.2 | 3.4 |
| PE Ratio | 6.1 | 24.3 |
| Discount vs 3-Month High | -41.5% | -3.5% |
| Discount vs 1-Year High | -42.2% | -7.7% |
| Discount vs 2-Year High | -55.9% | -10.6% |
*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
Stock Picking Falls Short Against Multi Asset Portfolios
Stocks soar and sink but bonds commodities and other assets balance the ride. A multi asset portfolio keeps returns steadier and reduces single market risk.
The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which 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