Wall Street valuations pigeonholing Tenet Healthcare ‘mostly as a hospital company,’ chairman complains

Executive Chairman Ron Rittenmeyer told investors Tuesday that the market “has not fully recognized” the value of Tenet Healthcare’s multi-year push into the ASC market and other restructuring efforts. This week the company set its 2022 guidance at $502 million to $677 million in profit ($4.56 to $6.16 per share) and $19.5 billion to $19.9 billion in full-year revenue. ((Tenet Healthcare))

By Dave Muoio  / Feb 8, 2022 

On a Tuesday morning earnings call, Tenet Healthcare executives painted the picture of a healthcare enterprise with multiple sources of consistent revenue, free cash flow and growing profits. 

The company has spent the last couple of years trimming the fat its hospital business, bolstering the margins of its revenue cycle solutions business and, notably, dropping billions in cash to become one of the largest providers of ambulatory surgery services in the country. 

Now with Tenet expecting half of its earnings to come from United Surgical Partners International (USPI), its ambulatory surgery subsidiary, by the end 2023, Executive Chairman and former CEO Ron Rittenmeyer questioned why the market is still primarily treating his company as a chain of acute care hospitals. 

“The recognition of USPI’s growing contribution and [revenue cycle subsidiary] Conifer’s cashflow generation, for some reason, seems lost in the broader question of Tenet being recognized as more than a hospital company,” Rittenmeyer said during Tuesday’s investor call. “With corresponding dialogues and our multiples remaining caught in this time lapse, it appears that the transition of what Tenet has become and the deleveraging we’ve accomplished are not fully recognized in the valuation of the company. We believe it’s a point of view worthy of consideration.”

Rittenmeyer said that Tenet has already proven to investors that its restructure is yielding strong results on par with surgery center companies “valued at unbelievable high numbers.”


Chris J. Stewart

Chris currently serves as President and CEO of Surgio Health. Chris has close to 20 years of healthcare management experience, with an infinity to improve healthcare delivery through the development and implementation of innovative solutions that result in improved efficiencies, reduction of unnecessary financial & clinical variation, and help achieve better patient outcomes. Previously, Chris was assistant vice president and business unit leader for HPG/HCA. He has presented at numerous healthcare forums on topics that include disruptive innovation, physician engagement, shifting reimbursement models, cost per clinical episode and the future of supply chain delivery.

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