Hospital operator Tenet Healthcare (NYSE: THC) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 9% year on year to $5.53 billion. On the other hand, the company’s full-year revenue guidance of $21.9 billion at the midpoint came in 1.4% below analysts’ estimates. Its non-GAAP profit of $4.70 per share was 16% above analysts’ consensus estimates.

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Company Overview

With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE: THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Tenet Healthcare’s sales grew at a tepid 3.9% compounded annual growth rate over the last five years. This wasn’t a great result compared to the rest of the healthcare sector, but there are still things to like about Tenet Healthcare.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Tenet Healthcare’s recent performance shows its demand has slowed as its annualized revenue growth of 1.8% over the last two years was below its five-year trend.

We can dig further into the company’s revenue dynamics by analyzing its same-store sales, which show how much revenue its established locations generate. Over the last two years, Tenet Healthcare’s same-store sales averaged 1.8% year-on-year growth. This number doesn’t surprise us as it’s in line with its revenue growth.

This quarter, Tenet Healthcare reported year-on-year revenue growth of 9%, and its $5.53 billion of revenue exceeded Wall Street’s estimates by 1.1%.

Looking ahead, sell-side analysts expect revenue to grow 4.2% over the next 12 months. Although this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average. At least the company is tracking well in other measures of financial health.

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Operating Margin

Tenet Healthcare has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average operating margin of 17%.

Looking at the trend in its profitability, Tenet Healthcare’s operating margin rose by 1.7 percentage points over the last five years, as its sales growth gave it operating leverage. This performance was mostly driven by its recent improvements as the company’s margin has increased by 4.2 percentage points on a two-year basis.

In Q4, Tenet Healthcare generated an operating margin profit margin of 15.4%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Tenet Healthcare’s EPS grew at an astounding 16.3% compounded annual growth rate over the last five years, higher than its 3.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Tenet Healthcare’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Tenet Healthcare’s operating margin was flat this quarter but expanded by 1.7 percentage points over the last five years. On top of that, its share count shrank by 18%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

In Q4, Tenet Healthcare reported adjusted EPS of $4.70, up from $3.44 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Tenet Healthcare’s full-year EPS of $16.78 to stay about the same.

Key Takeaways from Tenet Healthcare’s Q4 Results

We were impressed by how significantly Tenet Healthcare blew past analysts’ full-year EPS guidance expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance slightly missed. Overall, this print had some key positives. The stock remained flat at $193.07 immediately following the results.

Indeed, Tenet Healthcare had a rock-solid quarterly earnings result, but is this stock a good investment here? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).