Is Tenet Healthcare Corp. overvalued or undervalued?

As of 30 April 2025, Tenet Healthcare Corp. has moved from an expensive to a very expensive valuation grade. The company is currently overvalued, with a P/E ratio of 10, which is significantly higher than its peers such as Universal Health Services, Inc. at 8.86 and Chemed Corp. at 63.54. Additionally, Tenet's EV to EBITDA stands at 8.89, while Universal Health Services has a much lower ratio of 6.69, indicating a stark contrast in valuation metrics among these companies.
Notably, Tenet Healthcare's ROE is exceptionally high at 59.01%, which may suggest strong profitability; however, this does not justify its current valuation given the overall market conditions. The company's recent stock performance has outpaced the S&P 500, with a year-to-date return of 33.98% compared to the index's 2.44%. This performance, while impressive, does not mitigate the fact that Tenet Healthcare is overvalued relative to its peers and industry standards.