Universal Health Services is scored 79 for moat and 73 for management. The management score rests on a return on invested capital of 11.3% and a gross margin of 90.4% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.76x equity.
Three independent anchors set the price worth paying. Growth is modelled at 8.5% a year, the rate measured from the filings. The exit multiple assumed is 15.3x. That produces an intrinsic value of $207.61, a 10-CAP price of $186.65 and a payback time price of $219.14, with the value zone set at the highest of the three, $219.14. Today's price of $175.07 sits inside that zone.
A business scoring this well, trading inside its value zone, is the combination the framework exists to find — which is also the reason to check why the market disagrees. A margin of safety score of 59 describes the cushion, not the certainty.
| Price | $175.07 |
| Market cap | $10.6B |
| P/E ratio | 7.2x |
| Return on invested capital | 11.3% |
| Gross margin | 90.4% |
| Debt to equity | 0.76x |
| Free cash flow yield | 6.1% |
| Growth rate used | 8.5% |
| Growth rate measured | 8.0% |
| Exit multiple assumed | 15.3x |
| Company | Moat | Buy price |
| Align Technology (ALGN) | 51 | $134.51 |
| Cooper Companies (The) (COO) | 59 | $53.35 |
| Brightspring Health Services (BTSG) | 75 | $31.07 |
| Biomarin Pharmaceutical Inc (BMRN) | 84 | $53.67 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Universal Health Services rather than accepting ours.