Community Health Systems, Inc. CYH recently agreed to sell its 80% stake in Cedar Park Regional Medical Center and its associated businesses in Texas. Ascension Health, which currently holds a minority interest in Cedar Park Regional, is set to buy the remaining stake for $460 million in cash. 

The deal is expected to close by the late second quarter or early third quarter of this year. This announcement represents another milestone in Community Health’s mission to streamline operations to focus on profitable assets. 

CYH is continuing its push to refine its market focus and boost capital efficiency for many years. On its fourth-quarter 2024 earnings call, the company highlighted its ongoing evaluation of non-core assets, and this divestiture aligns perfectly with that strategy. These sales are expected to improve CYH’s same-store metrics. 

Some of its recent divestitures are Mooresville Hospital to Duke Health and ShorePoint Health System to Advent Health. These divestments are expected to have brought down the number of hospitals to 74. However, its $120 million planned sale of three Pennsylvania hospitals to WoodBridge Healthcare was terminated due to WoodBridge's inability to secure the funding.

The proceeds generated from these divestment efforts can be reinvested to enhance their better-performing markets or stakeholders’ worth. CYH’s debt-to-capital of 117.1% is significantly higher than the industry average of 92.3%. As such, its divestiture efforts could provide crucial debt reduction opportunities.

CYH Stock Price Performance

Over the past year, CYH shares have declined 14.4%, wider than the industry’s average of 4.2%. 

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CYH’s Zacks Rank & Key Picks

CYH currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Addus Homecare Corporation ADUS, Aveanna Healthcare Holdings, Inc. AVAH and Option Care Health, Inc. OPCH, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Addus Homecare’s current-year earnings is pegged at $6.04 per share, up from 14.8% a year ago. Addus Homecare beat earnings estimates in each of the past four quarters, with an average surprise of 5.8%. The consensus mark for its current-year revenues is pegged at nearly $1.4 billion, which indicates a 21.2% year-over-year jump.

The Zacks Consensus Estimate for Aveanna Healthcare’s 2025 earnings implies 100% year-over-year growth. In the past month, Aveanna Healthcare has witnessed three upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 163.3%.

The Zacks Consensus Estimate for Option Care Health’s current-year earnings is pegged at $1.68 per share, calling for 36.6% year-over-year growth. In the past two months, Option Care Health has witnessed six upward estimate revisions against none in the opposite direction. The consensus mark for the current year’s revenues suggests an 8.9% year-over-year increase.
 

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Community Health Systems, Inc. (CYH) : Free Stock Analysis Report

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