Community Health Systems Inc (NYSE: CYH)

Sector: Healthcare Industry: Medical Care Facilities CIK: 0001108109
Market Cap 460.07 Mn
P/B -0.31
P/E 1.40
P/S 0.04
ROIC (Qtr) -33.38
Div Yield % 0.00
Rev 1y % (Qtr) -0.10
Total Debt (Qtr) 11.24 Bn
Debt/Equity (Qtr) -7.48
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About

Investment thesis

Bull case

  • Operating cash flow of 493M provides strong 41.08x coverage of stock compensation 12M, indicating sustainable incentive practices.
  • Robust tangible asset base of 9.70B provides 9.51x coverage of working capital 1.02B, indicating strong operational backing.
  • Tangible assets of 9.70B provide robust 8.38x coverage of other current liabilities 1.16B, indicating strong asset backing.
  • Retained earnings of (3.68B) represent substantial 2.45x of equity (1.50B), indicating strong internal capital generation.
  • Operating cash flow of 493M provides strong 14.94x coverage of tax liabilities 33M, showing excellent fiscal position.

Bear case

  • Operating cash flow of 493M barely covers its investment activities of 562M, with a coverage ratio of 0.88, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 123M provide limited coverage of acquisition spending of 982M, which is 0.13x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 2.16B relative to inventory of 325M (6.64 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 151M provides weak coverage of capital expenditures of 342M, with a 0.44 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 1.27B show weak coverage of depreciation charges of 446M, with a 2.86 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2022)

Peer comparison

Companies in the Medical Care Facilities
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 HCA HCA Healthcare, Inc. 126.41 Bn 18.63 1.67 48.35 Bn
2 UHS Universal Health Services Inc 23.26 Bn 34.22 2.61 5.11 Bn
3 THC Tenet Healthcare Corp 21.11 Bn 15.01 0.99 13.17 Bn
4 FMS Fresenius Medical Care AG 14.42 Bn 17.06 0.62 14.98 Bn
5 EHC Encompass Health Corp 13.38 Bn 30.01 2.91 2.66 Bn
6 ENSG Ensign Group, Inc 12.18 Bn 35.41 2.41 2.21 Bn
7 DVA Davita Inc. 11.17 Bn 14.95 0.82 12.87 Bn
8 CHE Chemed Corp 8.11 Bn 81.70 5.57 0.14 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.87 1.24
EV to Cash from Ops. EV/CFO 23.31 15.08
EV to Debt EV to Debt 1.02 11.01
EV to EBIT EV/EBIT 9.02 15.96
EV to EBITDA EV/EBITDA 7.52 11.44
EV to Free Cash Flow [EV/FCF] EV/FCF 76.11 21.76
EV to Market Cap EV to Market Cap 24.98 619.57
EV to Revenue EV/Rev 0.91 2.71
Price to Book Value [P/B] P/B -0.31 -6.00
Price to Earnings [P/E] P/E 1.40 12.61
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.14
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -13.46
Dividend per Basic Share Div per Share (Qtr) 0.00 0.27
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 5.42
Interest Coverage Int. cover (Qtr) 1.47 -94.29
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 3.66 -116.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 272.73 46.03
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.98
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 42.46 -42.57
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 18.91 91.55
EBIT Growth (1y) % EBIT 1y % (Qtr) 132.06 -56.79
EBT Growth (1y) % EBT 1y % (Qtr) 234.65 -111.80
EPS Growth (1y) % EPS 1y % (Qtr) 181.73 -19.28
FCF Growth (1y) % FCF 1y % (Qtr) 15,200.00 188.37
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.94 20.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.96 1.02
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.04
Cash Ratio Cash Ratio (Qtr) 0.06 0.40
Current Ratio Curr Ratio (Qtr) 1.47 1.36
Debt to Equity Ratio Debt/Equity (Qtr) -7.48 -13.23
Interest Cover Ratio Int Coverage (Qtr) 1.47 -94.29
Times Interest Earned Times Interest Earned (Qtr) 1.47 -94.29
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.60 -75.46
EBIT Margin % EBIT Margin % (Qtr) 10.08 -74.60
EBT Margin % EBT Margin % (Qtr) 3.23 -85.12
Gross Margin % Gross Margin % (Qtr) 84.80 23.17
Net Profit Margin % Net Margin % (Qtr) 2.60 -85.79