Universal Healthcare Svc. (UHS) has rallied with the market over the last few months, with earnings estimates going along for the ride and rising in tandem.

Company Description

Universal Healthcare Services, Inc., through its subsidiaries, owns and operates acute care hospitals, surgery centers and radiation oncology centers. As of February 26, 2009, the company owned and operated 26 acute care hospitals and 101 behavioral health centers in 32 states, as well as in Washington, DC and Puerto Rico. Universal Healthcare was founded in 1978 and has a market cap of $2.51 billion.

First-Quarter Results

Universal Healthcare reported strong first-quarter results on April 27 that were ahead of estimates. Revenue was up 3% from last year to $1.31 billion. Earnings came in $1.37 per share, 24 cents ahead of the consensus estimate.

Universal reported that admissions at its behavioral health hospitals was up 1.1% while revenue per adjusted patient day increased 4.8%.

Estimates Jump

After the solid quarter, analysts went ahead and raised their earnings projections, with the current-year climbing 13 cents to $4.10 per share. The next-year estimate is pegged at $4.35, a 6% earnings growth projection.

Valuations

Based on the current-year estimate, this stock has a forward P/E multiple of 12.5X, in line with the overall market and a reasonable multiple for a stock with a respectable growth projection.

The Chart

Shares of UHS took flight in early March with the overall market, rallying from $30.50 to a recent high above $53. Take a look below.

Zacks Investment Research
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