Why Is Universal Health Services (UHS) Up 5.7% Since Last Earnings Report?

A month has gone by since the last earnings report for Universal Health Services (UHS). Shares have added about 5.7% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Universal Health Services due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

UHS Beats Q2 Earnings and Revenue Estimates Despite Cost Pressures

Universal Health Services reported second-quarter 2026 adjusted earnings per share (EPS) of $5.98, which beat the Zacks Consensus Estimate by 5.7%. The bottom line rose 10.1% year over year.

Net revenues of $4.6 billion improved 8.3% year over year. The top line beat the consensus mark by 2.6%.

The strong quarterly results were driven by healthy revenue growth across both the Acute Care and Behavioral Health segments. Higher adjusted admissions, increased patient days and improved unit revenues on a same-facility basis supported performance in both businesses. However, the upside was partly offset by elevated operating costs.

UHS’ Quarterly Operational Update

Adjusted EBITDA, net of NCI, rose 5.4% year over year to $677.9 million, and beat our estimate of $647.5 million.

Total operating costs were $4.1 billion, which escalated 8.9% year over year due to higher salaries, wages and benefits, supplies expense, and other operating expenses. The metric came slightly higher than our estimate of $4 billion.

UHS’ Q2 Segmental Update

Acute Care Hospital Services

On a same-facility basis, UHS' acute care business delivered solid volume and higher unit revenues in the second quarter of 2026. Adjusted admissions (adjusted for outpatient activity) increased 2.9% year over year, while adjusted patient days grew 3.1%. Net revenue per adjusted admission increased 3.0%, and net revenue per adjusted patient day rose 2.8%. Net revenues from Universal Health's acute care services increased 8.2% on a same-facility basis.

Behavioral Health Care Services

Behavioral health care also posted solid same-facility revenue growth, supported by modest volume gains and higher unit revenues. Adjusted admissions inched up 0.5% on a same-facility basis, while adjusted patient days increased 1.4%. Net revenue per adjusted admission improved 7.1%, and net revenue per adjusted patient day increased 6.1%. Net revenues from UHS' behavioral health care services grew 7.4% on a same-facility basis.

Universal Health’s Q2 Financial Update

Universal Health exited the second quarter with cash and cash equivalents of $138.8 million, which improved from the 2025-end level of $137.8 million. As part of its $1.5 billion revolving credit facility, net of outstanding borrowings and letters of credit, UHS had approximately $1.3 billion of available borrowing capacity at the end of the second quarter. Total assets of $15.9 billion increased from the 2025-end figure of $15.5 billion.

Long-term debt amounted to $4.1 billion, which increased from $4 billion as of 2025-end. Current maturities of long-term debt totaled $771.9 million.

Total equity of $7.6 billion advanced from the 2025-end figure of $7.3 billion.

UHS generated operating cash flow of $844.9 million in the first six months of 2026, down 7.1% from the year-ago period’s level.

UHS’ Share Repurchase Update

Universal Health repurchased shares worth approximately $320.3 million during the second quarter of 2026. The remaining authorization under its share repurchase program was approximately $977.6 million as of June 30, 2026.

2026 Guidance

Management now expects net revenues of $18.501-$18.762 billion compared with its earlier guidance of $18.417-$18.789 billion. The midpoint of the revised guidance implies 7.3% growth from the 2025 figure of $17.365 billion.

Adjusted EBITDA, net of NCI, is now projected to be in the range of $2.610-$2.717 billion, down from the previous forecast of $2.641-$2.789 billion. The midpoint of the revised range indicates 2.8% growth from the 2025 level of $2.59 billion.

Adjusted EPS is now expected to be in the band of $22.28-$23.65 compared with the prior outlook of $22.64-$24.52. The midpoint suggests 5.6% growth from the 2025 figure of $21.74. Capital expenditures are still expected to be between $950 million and $1.1 billion, on par with the previous guidance.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -5.42% due to these changes.

VGM Scores

Currently, Universal Health Services has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Universal Health Services has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Universal Health Services belongs to the Zacks Medical - Hospital industry. Another stock from the same industry, Community Health Systems (CYH), has gained 6.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Community Health Systems reported revenues of $2.83 billion in the last reported quarter, representing a year-over-year change of -9.8%. EPS of -$0.19 for the same period compares with -$0.05 a year ago.

For the current quarter, Community Health Systems is expected to post a loss of $0.22 per share, indicating a change of -117.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.2% over the last 30 days.

Community Health Systems has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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