Universal Health Services IncUHS · NYSE

Why the market may be pricing it low

• If found in violation of anti-kickback or Stark Law rules, UHS faces criminal penalties and even loss of facility licenses.

  If we are deemed to have failed to comply with the anti-kickback statute, the Stark Law or other applicable laws and regulations, we could be subjected to liabilitiesBusiness

• Even if UHS ultimately prevails, a significant governmental inquiry or action could itself have a material adverse impact.

  Even if we were to ultimately prevail, a significant governmental inquiry or action under one of the above laws, regulations or rules could have a material adverse impact on usMD&A

• Rising government review of nonprofit hospital conversions constrains UHS's ability to grow through acquisitions.

  the trend is to provide for increased governmental review and, in some cases, approval of a transaction in which a not-for-profit entity sells a health care facility to a for-profit entityMD&A

What could close the gap

• Proposed state certificate-of-need reforms that ease capital-spending review thresholds could soften the regulatory-burden narrative.

  significant CON reforms have been proposed in a number of states that would increase the capital spending thresholds and provide exemptions of various services from review requirementsMD&A

• The outcome of the May 2026 annual meeting vote (Item 5.07) could signal growing shareholder pressure on capital policy or governance.

  2026-05-22 Item 5.078-K filings

How a buyer could still lose (value trap)

• Cash of $138.8M versus borrowings of $4,851.8M — about 35x — leaves little financial cushion.

  Based on the figures below

• Operating income of $2,058M on $18,114M of revenue is only an ~11% margin, thin enough that reimbursement cuts could quickly erode profits.

  Based on the figures below

Financial quality (Piotroski F-score)

• ✓Profitable (ROA > 0)
• ✓Positive operating cash flow
• ✓ROA up on last year
• ✓Cash flow exceeds net profit
• ✓Leverage down on last year
• ✗Current ratio up on last year
• ✓No new shares issued
• –Gross margin up on last yearno data
• ✓Asset turnover up on last year

Scored out of the checks with data, scaled to 9. Compares the latest year with the year before.

Figures

Sales

$18.1bn

Operating profit

$2.1bn

Net profit

$1.5bn

Operating cash flow

$1.8bn

Cash

$139m

Debt

$4.9bn

Equity

$7.5bn

Latest twelve months to 2026-06-30; F-score for the fiscal year to 2025-12-31