What Happened?

Shares of hospital operator Tenet Healthcare (NYSE: THC) fell 5% in the afternoon session after the company reported third-quarter results that showed declining profitability despite beating headline expectations. While the hospital operator's earnings per share and revenue for the period surpassed Wall Street estimates and it raised its financial outlook for the full year, investors appeared to focus on weaker underlying metrics. The company's operating margin fell to 16.8% in the quarter, a significant drop from 21.3% during the same period in the previous year. This contraction in profitability seemed to overshadow the positive headline numbers, prompting the negative market reaction.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Tenet Healthcare? Access our full analysis report here.

What Is The Market Telling Us

Tenet Healthcare’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock gained 12.2% on the news that the company reported first-quarter 2025 results, which blew past analysts' EPS expectations on a solid revenue beat. Even though total revenue dipped a bit, that was mostly from selling off some hospitals. Looking ahead, Tenet raised its full-year adjusted EPS guidance, while keeping its revenue outlook unchanged, signaling confidence in margin expansion even without top-line acceleration. Overall, this quarter was still solid.

Tenet Healthcare is up 65.2% since the beginning of the year, and at $206.89 per share, it is trading close to its 52-week high of $216.17 from October 2025. Investors who bought $1,000 worth of Tenet Healthcare’s shares 5 years ago would now be looking at an investment worth $8,279.

Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.