Universal Health Services (UHS) Down 9.4% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Universal Health Services (UHS). Shares have lost about 9.4% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Universal Health Services due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.Universal Health's Q4 Earnings Miss on Softer Volumes & Rising CostsUniversal Health reported fourth-quarter 2025 adjusted earnings per share (EPS) of $5.88, which missed the Zacks Consensus Estimate by 0.6%. The bottom line soared 19.5% year over year.Net revenues of $4.49 billion improved 9.1% year over year. The top line beat the consensus mark by a whisker.The quarterly results suffered from lower-than-expected admissions, adjusted patient days and elevated operating costs. The negatives were partially offset by higher net revenue per adjusted admissions.UHS’ Quarterly Operational UpdateAdjusted EBITDA, net of NCI, rose 10.4% year over year to $678.7 million, but came lower than our estimate of $681 million. Total operating costs came in at $3.97 billion, which escalated 9% year over year in the quarter under review due to higher salaries, wages and benefits, supplies and other operating expenses. The metric came higher than our estimate of $3.93 billion.UHS’ Segmental UpdateAcute Care Hospital ServicesAdjusted admissions (adjusted for outpatient activity) remained flat on a same-facility basis in the fourth quarter, which missed our model estimate of 1.4% growth. Adjusted patient days declined 0.7% year over year, while net revenue per adjusted admission advanced 5.4%. Net revenues stemming from Universal Health’s acute care services improved 6.9% on a same-facility basis.Behavioral Health Care ServicesAdjusted admissions inched up 1.8% on a same-facility basis, which was lower than estimated. Adjusted patient days rose 1.5%, while net revenue per adjusted patient days advanced 5.6%. Net revenues derived from UHS’ behavioral healthcare services improved 7.2% on a same-facility basis.Financial Update of UHS (As of Dec. 31, 2025)Universal Health exited the fourth quarter with cash and cash equivalents of $137.8 million, which rose from the 2024-end level of $126 million. As part of its $1.3 billion revolving credit facility, net of outstanding borrowings and letters of credit, there remains an aggregate available borrowing capacity of $889 million at the fourth-quarter end. Total assets of $15.53 billion increased from the $14.47 billion figure at 2024-end. Long-term debt amounted to $4 billion, which declined from $4.46 billion at 2024-end. Current maturities of long-term debt totaled $748.2 million.Total equity of $7.34 billion advanced from the 2024-end figure of $6.75 billion.UHS generated cash flows from operations of $1.86 billion for 2025, which slipped from the prior-year comparable period’s $2.07 billion.UHS’ Share Repurchase UpdateUniversal Health bought back shares worth around $333.5 million in the fourth quarter and $899.3 million in 2025. The total remaining authorization available under the buyback program now stands at $1.4 billion.2026 GuidanceManagement currently forecasts net revenues within $18.417-$18.789 billion. The mid-point of the guidance implies 7.1% growth from the 2025 figure of $17.365 billion. Adjusted EBITDA, net of NCI, is anticipated to be in the range of $2.641-$2.789 billion in 2026, indicating a 4.8% growth from the 2025 level of $2.59 billion. EPS is presently expected in the band of $22.64-$24.52, the mid-point of which suggests 8.5% growth from the 2025 figure of $21.74.Capital expenditures are expected to be between $950 million and $1.1 billion.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.VGM ScoresCurrently, Universal Health Services has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock has a grade of A on the value side, putting it in the top 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Universal Health Services has a Zacks Rank #3 (Hold). 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