Community Health Systems, Inc. CYH recently closed the acquisition of certain urgent care centers in Arizona from Carbon Health. The buyout made through CYH’s subsidiary, Northwest Urgent Care, a part of Northwest Healthcare, enhances the company’s capacity and footprint in the region. The transaction was completed within the scheduled time.

The move expanded Northwest Healthcare’s network to more than 80 care sites. Northwest Healthcare has committed around $200 million to strategic growth and capital projects across the Greater Tucson Metro area in the last five years. Last year, it provided medical care for more than 845,000 patients.

Acquisitions and partnerships have been crucial to Community Health Systems' growth. The company focuses on acquiring hospitals where it can enhance value by expanding specialty services, achieving economies of scale, investing in new technology and improving process management. CYH is also increasing capacity by adding beds to its existing facilities to meet the rising demand for healthcare services.

The company operates across 39 markets in 15 states.Through its subsidiaries, it owns or leases 70 hospitals with over 11,000 beds and runs more than 1,000 care sites. With improvement in economic conditions, mergers and acquisitions within the healthcare sector are likely to increase.

CYH reported a third-quarter 2024 adjusted loss of 30 cents per share, wider than the Zacks Consensus Estimate of a loss of 16 cents, due to lower admissions, patient days, and higher salaries and benefits expenses. The company’s focus on expanding capacity will likely improve its volumes and numbers.

Earlier, the company raised its net operating revenue guidance to $12.45-$12.55 billion for 2024, the mid-point of which is the same as the 2023 figure of $12.5 billion. It also expects net loss per share to be between 60 cents and 50 cents in 2024, improving from a net loss of $1.39 per share in 2023.

CYH Price Performance

Community Health’s shares have increased 30.1% in the past year compared with the 26.8% rise of the industry it belongs to.

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Zacks Rank & Key Picks

Community Health currently has a Zacks Rank #3 (Hold).

Some better-ranked and promising stocks in the broader Medical sector are Pediatrix Medical Group, Inc. MD, CareDx, Inc. CDNA and Encompass Health Corporation EHC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Pediatrix Medical’s current-year earnings indicates a 7.1% year-over-year growth. MD beat earnings estimates in three of the trailing four quarters and met once, with an average surprise of 9.9%. The consensus mark for its current-year revenues is pegged at $2 billion.

The Zacks Consensus Estimate for CareDx’s current-year earnings indicates a 162.5% year-over-year improvement. CDNA beat earnings estimates in each of the trailing four quarters, with an average surprise of 135.2%. The consensus mark for revenues implies 17.5% growth from the year-ago period.

The Zacks Consensus Estimate for Encompass Health’s 2024 earnings implies a 17.6% increase from the year-ago reported figure. EHC beat earnings estimates in each of the trailing four quarters, with an average surprise of 13.6%. The consensus mark for its current-year revenues is pegged at $5.34 billion, which indicates an 11.2% year-over-year increase.

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