QS Research · Michael Burry's Scion Capital analyst template · 2006
HCA Healthcare, Inc. (HCA)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction medium · base case 0% · downside -5% · upside +2%
Section 13's 7.5x-11.5x cases change the multiple, but no cited non-valuation catalyst justifies a rerating, so I hold today's 9.6x TTM EV/EBITDA and move only the EBITDA base. At 9.6x the $15.92B TTM EBITDA gives EV $152.8B; less $49.59B net debt is $103.25B equity, or about $494/share, essentially today's $494.99. Using FY2026 guided Adjusted EBITDA of $15.40-$16.10B gives about $470 to $503, or -5% to +1.5%, so the base, downside and upside are tight. HCA has real cash generation and buybacks, but payer-mix deterioration, leverage and a 9.6x multiple that is a premium to THC/UHS leave no deep-value edge; pass.
Key numbers
- Share price: $494.99
- Market cap: $103.40B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $78.70B
- EV / EBITDA (TTM): 9.6x
- P/E (TTM): 15.3x
The 15 boxes
- ✓ 1. Long-form business notes
HCA is a hospital and outpatient facility operator that earns revenue primarily from managed care and other insurers (48.9% of FY2025 revenue), Medicare/Managed Medicare (14.9%/17.8%), and Medicaid/Managed Medicaid (7.8%/4.9%), with reimbursement set by payer and site of service. Through predecessors it began operations in 1968 and was incorporated in Delaware in October 2010. Between the FY2020 and FY2025 10-Ks, revenue rose from $51.53B to $75.60B, operating cash flow from $9.23B to $12.64B, and the footprint shifted to more behavioral/rehab hospitals and endoscopy centers; buybacks were $10.07B in FY2025, diluted shares fell from 343.61M in FY2020 to 239.50M in FY2025, and total equity went from $572.0M to -$6.03B.
- ✓ 2. Competitive advantage
HCA shows scale and cash generation — 190 hospitals at December 31, 2025, 102 in Florida/Texas, and FY2025 operating cash flow of $12.64B against $4.94B capex — but the 10-K describes local hospital competition as highly competitive, with tax-supported/not-for-profit rivals, payer consolidation and physician mobility. FY2020-FY2025 net income was positive every year, yet total equity was -$6.03B at FY2025 after $10.07B of FY2025 buybacks, and $46.492B of debt is explicitly called a competitive disadvantage. The sources support a narrow/local scale advantage, not a wide durable moat.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue rose 3.6% to $19.849 billion and same-facility revenue also rose 3.6%, but net income attributable to HCA fell 3.9% to $1.579 billion even with a $13 million facility-sale gain; the release estimates a ~$400 million unfavorable Q3 pretax payer-mix impact from uninsured volume. Margins were pressured by other operating expenses at 23.0% of revenue versus 21.8%, while Q3 operating cash flow was $4.461 billion and Q3 buybacks were $2.970 billion. 2026 guidance is only the upper half of prior ranges, and the 10-Q reports no material risk-factor changes.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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