Is Tenet Healthcare Corp. overvalued or undervalued?

As of 22 July 2025, Tenet Healthcare Corp. has moved from a very expensive to a fair valuation grade. The company appears to be fairly valued based on its current metrics, with a P/E ratio of 10, an EV to EBITDA ratio of 8.89, and a Price to Book Value of 5.79. In comparison to its peers, Tenet's P/E ratio is slightly lower than the peer average of approximately 10.41, while its EV to EBITDA ratio is more favorable than the peer average of 9.11.
The company's strong return on equity (ROE) of 59.01% and return on capital employed (ROCE) of 21.26% indicate efficient use of capital, reinforcing the fair valuation assessment. Over the past year, Tenet Healthcare has returned 18.14%, slightly outperforming the S&P 500's return of 17.14%, and its impressive 5-year return of 574.07% significantly exceeds the S&P 500's 96.61%, suggesting strong growth potential.