HCA’s EPS Compounds at 13.3% While Margins Surge and Shares Fall 19.3%
SGRY•HCA’s revenue grew 7.9% over three years while EPS compounded 13.3% as operating margins climbed from 14.6% to 15.7% and share count fell 19.3%. Revenue growth eased to 6.7% last year, yet EPS gains outpace top-line growth as buybacks shrink shares, sending the stock’s 12.7x P/E to a decade low.
1. EPS and Revenue Growth
Over the past three years, HCA’s revenue grew 7.9% compounded annually while EPS rose 13.3% annually, highlighting a strong divergence between the top line and profit per share.
2. Margin Expansion
Operating margins climbed from 14.6% to 15.7% over the same period, driven by improved cost control and efficiency measures across its hospital and outpatient services.
3. Share Buybacks
HCA reduced its outstanding shares by about 19.3% in three years through buybacks, concentrating earnings among fewer shares and boosting per-share profitability.
4. Valuation Gap
Despite durable earnings growth and margin gains, the stock trades at a 12.7x trailing P/E near its 10-year low, suggesting the market may be undervaluing its compounding engines.
