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QS Research · Michael Burry's Scion Capital analyst template · 2006

HCA Healthcare, Inc. (HCA)

As of 2026-11-02 · 12/15 boxes filled from SEC filings and market data

Conclusion: WATCH

Conviction low · base case 0% · downside -54% · upside +40%

Using the current 9.2x TTM EV/EBITDA multiple as the base case, N24's enterprise value of $146.03B plus $0.908B cash minus $50.49B debt gives $96.45B equity, or $461.68 per share on 208.89M shares, i.e. 0% vs today's price. The downside at 5.9x on TTM EBITDA of $15.92B gives EV $93.9B, equity $44.3B, and $212 per share, -54%; the upside at 11.6x gives EV $184.7B, equity $135.1B, and $647 per share, +40%. HCA is not cheap on current earnings: 14.2x TTM P/E and 9.2x EV/EBITDA sit above closest for-profit hospital peers, and TTM buybacks plus dividends exceed free cash flow by $3.87B, implying debt-funded returns. The market may be underestimating the durability of the payer-mix hit, but Q3 volume acceleration and upper-half guidance keep the short rule from being met. I would watch for either a multiple re-rating toward 5.9x that meets the short rule or evidence the payer-mix shift is transitory.

Key numbers

The 15 boxes

  1. ✓ 1. Long-form business notes

    HCA Healthcare operates one of the largest U.S. hospital networks: at FY2025-end, 190 hospitals (179 acute, seven behavioral, four rehabilitation), 121 freestanding ASCs, and 31 endoscopy centers across 19 states and England. Revenue comes from patient services paid by Medicare, Medicaid, managed Medicare/Medicaid, commercial insurers, international payers, and self-pay/uninsured; commercial managed care and other insurers were 48.9% of FY2025 revenue, Medicare 14.9%, Managed Medicare 17.8%, Medicaid 7.8%, Managed Medicaid 4.9%, International 2.5%, Other 3.2%. Between FY2020 and FY2025, HCA grew from 185 to 190 hospitals, general acute licensed beds from 48,492 to 50,436, revenue from $51.53B to $75.60B, and operating cash flow from $9.23B to $12.64B. FY2025 strategy added digital/AI capabilities and expanded outpatient/home-based service lines; Medicare inpatient MS-DRG rates for FFY2026 increased 2.6%.

  2. ✓ 2. Competitive advantage

    HCA operates in a highly competitive hospital market with no explicitly identified durable moat: competitors include tax-supported and not-for-profit entities with tax exemptions, specialty hospitals, and ASCs. Its competitive position hinges on physician affiliations, quality, and payer contract negotiations, while payer consolidation increases bargaining pressure. FY2025 scale is large ($75.60B revenue, $12.64B operating cash flow), but debt of $46.492B and negative equity (-$6.03B) create competitive disadvantages relative to less-levered peers.

  3. ✓ 3. 10-Q takeaways

    Q3 2026 revenue grew 3.6% y/y to $19.849 billion, with same-facility growth also 3.6%, while net income attributable to HCA fell 3.9% to $1.579 billion, including a $13 million facility-sale gain. Volumes rose on equivalent admissions and ED visits, but surgical volumes declined and uninsured admissions jumped 27%. Margins were mixed: labor and supplies ratios improved, but other operating expense ratio rose; buybacks continued. Nine-month operating cash flow fell due to deferred 2025 taxes; 2026 capex is guided to $5.0–5.5 billion excluding acquisitions, and risk factors were unchanged.

  4. ✓ 4. Corporate governance
  5. ✓ 5. Overview of the prior 3 years of 8-K filings
  6. ✓ 6. Other significant filings
  7. ✓ 7. Chronology of significant news and events
  8. ✓ 8. Comparables valuation interpretation
  9. ✓ 9. Insider trading interpretation
  10. ○ 10. Earnings-call notes
  11. ○ 11. Impression of the shareholder letter
  12. ○ 12. Scuttlebutt overview
  13. ✓ 13. Valuation and risk/reward summary
  14. ✓ 14. Current price suppression and potential catalysts

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