Market Sentiment Around Loss-Making Community Health Systems, Inc. (NYSE:CYH)
Community Health Systems, Inc.'s (NYSE:CYH): Community Health Systems, Inc., through its subsidiaries, owns, leases, and operates general acute care hospitals in the United States. On 31 December 2019, the US$381m market-cap posted a loss of -US$675.0m for its most recent financial year. Many investors are wondering the rate at which CYH will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for CYH.
Check out our latest analysis for Community Health Systems
CYH is bordering on breakeven, according to the 11 Healthcare analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$21m in 2022. CYH is therefore projected to breakeven around 2 years from today. How fast will CYH have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 107% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving CYH’s growth isn’t the focus of this broad overview, though, bear in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before I wrap up, there’s one issue worth mentioning. CYH currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
There are too many aspects of CYH to cover in one brief article, but the key fundamentals for the company can all be found in one place – CYH’s company page on Simply Wall St. I’ve also put together a list of relevant aspects you should further research:
Valuation: What is CYH worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether CYH is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Community Health Systems’s board and the CEO’s back ground.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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