Community Health Systems Up 33% On Enormous Beat

Shares of one of the nation’s largest publicly held hospital companies, Community Health Systems CYH, skyrocketed over 33 percent Tuesday following a massive fourth-quarter earnings beat.

Community Health Systems generated $4.469 billion in revenue along with +0.5 percent same-store growth in the fourth quarter. The company crushed earnings estimates in its release Monday, with EPS coming in at $0.46, far above the $0.13 target Wall Street analyst set for the quarter.

Analyst Commentary

“We believe Community is a high-risk/high-reward opportunity, as the stock trades at distressed valuations due to deterioration in its business model failure to capitalize on cost opportunities, and poor integration of HMA,” said Oppenheimer on Tuesday.

Despite the huge share price jump on Tuesday, Oppenheimer still sees shares as undervalued, maintaining an Outperform rating on the stock with a $9 price target. Analysts believe the company can still unlock value if it can successfully divest assets or find a suitor for an outright sale.