What Really Drove HCA Stock Higher?
For questions about this article or underlying research, email help@trefis.com.
HCA Healthcare (HCA) runs hospitals, urgent care facilities and ambulatory surgery centers. Its stock rose 107.8% before dividends from the end of September 2021 to November 10, 2026. A gain of that size makes it natural to give the business all the credit. So how much of that rise do you think came from HCA simply selling more?
How Much Did HCA’s Sales Grow?
HCA’s sales rose from $58.0 billion in the twelve months to September 2021 to $78.7 billion in the twelve months to September 2026. That is a 35.7% rise, against 107.8% for the stock. So selling more explains about two-fifths of the stock’s rise. The split compares how much each source compounded rather than dividing one percentage by the other. That is why the four sources in the table below add up to 100%.
The growth was real. Management said the third quarter of 2026 marked HCA’s 22nd quarter in a row of patient volume growth.
What Else Lifted HCA Stock?
The rest of the rise came from three other sources, and not all of them helped.
| Source | Then | Now | Share of the stock’s rise |
|---|---|---|---|
| Sales, twelve months | $58 billion | $78.7 billion | 41.8% |
| Net margin | 11.3% | 8.6% | -37.5% |
| Price-to-earnings multiple | 12 | 16.2 | 41.1% |
| Diluted share count | 324 million | 217 million (-33%) | 54.7% |
Then: sales and net margin for the twelve months to Sep 30, 2021, the diluted share count for the quarter ended that day, and the multiple at the close of Sep 30, 2021. Now: the twelve months and the quarter to Sep 30, 2026, and the multiple at the close of Nov 10, 2026. The four shares add up to 100% before rounding. A negative share means that source pulled the price down. Split-adjusted share price, dividends excluded.
Buybacks provided the biggest lift. HCA’s diluted share count fell 33% over the five years, a drop that alone explains more than half of the stock’s rise. Buybacks represent a real use of the company’s cash, but they are not the same as selling more.
A higher price-to-earnings multiple, representing what investors pay for each dollar of profit, explains about as much of the rise as sales do. The net margin, the share of sales HCA keeps as profit, shrank. The stock rose less because of it.
Can Margins And Multiples Keep Rising?
Not without end, and the margin at HCA has fallen rather than risen. The company kept 8.6% of its sales as profit over the latest twelve months. That figure sits below its ten-year high of 11.8% at the end of 2021, though it remains above the level seen at most quarter ends over that time. State Medicaid payments generated some of that profit, and management said part of those payments in 2026 were one-time. Management expects $550 million to $650 million less from these programs in 2027, and 2027 earnings generally consistent with 2026.
On the share price at the end of September 2026, HCA stock traded at 13.5 times profit, below its ten-year high of 17.6 in September 2024. The table above uses the November 10 close, which puts the multiple at 16.2. The stock rose about 18% in those six weeks, so most of the multiple’s lift came after September 30. HCA can keep selling more for as long as it treats more patients. A margin cannot widen without end and a multiple cannot rise without end, so gains from them do not repeat the way gains from selling more can.
What HCA Would Need To Repeat Its Rise
If the margin, the multiple and the share count stayed where they are, HCA’s sales would have to grow about 15.4% a year for the stock to rise as much again over a stretch as long as the last one. Over the past five years, sales grew 6.3% a year. So HCA would have to grow sales more than twice as fast as it has.
Adjusted admissions at the same hospitals rose 3% in the third quarter, and management expects volume growth of 2% to 3% in 2027. Patients who lost coverage on the health insurance exchanges have moved almost one for one to uninsured, and HCA earned less in the quarter as a result, management said.
HCA’s sales growth, which stood at 3.6% from a year earlier in the third quarter, is the figure to watch when the company reports in January 2027.
Want Income To Go With Your Growth Stocks?
Growth stocks pay off mostly when you sell. Dividend stocks pay you along the way. The Trefis Income Solution owns 50 companies chosen to keep paying, each with at least 10 straight years of dividends, yielding about 3x the S&P 500.
Spot an error or want more like this? Tell us in 10 seconds.