{"schemaVersion":1,"research":true,"symbol":"uhs","name":"Universal Health Services","topic":"moat","path":"/stock/uhs/moat","status":"published","version":3,"updatedAt":"2026-10-18T01:13:01.510Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"none","summary":"The passages establish comparable competing services across UHS markets and weak physician affiliation barriers, rather than a durable company-wide moat. A long-term nominal-rent hospital lease provides a localized cost benefit, and commercial reimbursement increases demonstrate some pricing ability. Neither establishes protected pricing or durable competitive superiority. Strong 2025 operating growth must be weighed against reimbursement constraints, expanding competition and realized insurance and financing pressures.","advantages":[{"mechanism":"cost_advantage","claim":"The operating District Facilities have a contractual nominal-rent benefit. This is a current, localized input-cost advantage; its company-wide significance and net advantage after operating and investment obligations are unproven.","durability":"The disclosed lease runs for 75 years, subject to operating obligations, participation rent and termination provisions. Contract length does not establish durable superior economic returns.","risks":"Required infrastructure spending, participation rent, termination costs and reimbursement pressure can offset the rental benefit. Comparable competing facilities prevent an inference of local exclusivity.","invalidation":"The economic advantage would be invalidated if required spending, participation rent and operating obligations eliminate the rental savings relative to comparable alternatives, or if the lease ends.","competitors":[],"evidenceIds":["e5","e6","e7","e8"],"counterEvidenceIds":["e1","e9","e10"]}],"evidence":[{"id":"e1","sourceId":"filing-1","location":"Business—Competition","excerpt":"In all of the geographical areas in which we operate, there are other facilities that provide services comparable to those offered by our facilities."},{"id":"e2","sourceId":"filing-1","location":"Risk Factors—Increasing competing facility supply","excerpt":"The number of inpatient facilities, as well as outpatient surgical and diagnostic centers, many of which are fully or partially owned by physicians, in the geographic areas in which we operate has increased significantly."},{"id":"e3","sourceId":"filing-2","location":"Physician recruitment and affiliation risks","excerpt":"Physicians generally are not employees of our hospitals, and, in a number of our markets, physicians have admitting privileges at other hospitals in addition to our hospitals."},{"id":"e4","sourceId":"filing-2","location":"Physician affiliation termination rights","excerpt":"They may terminate their affiliation with us at any time."},{"id":"e5","sourceId":"filing-2","location":"Commitments and Contingencies—District Facilities opening","excerpt":"Construction of the acute care hospital (Cedar Hill Regional Medical Center) was completed and the hospital opened on April 15, 2025."},{"id":"e6","sourceId":"filing-2","location":"Commitments and Contingencies—District Facilities lease","excerpt":"We are leasing the District Facilities for a nominal rental amount for a period of 75 years and are obligated to operate the District Facilities during the lease term."},{"id":"e7","sourceId":"filing-2","location":"Commitments and Contingencies—Participation rent","excerpt":"The lease agreement also entitles the District to participation rent should certain specified earnings before interest, taxes, depreciation and amortization thresholds be achieved by the acute care hospital."},{"id":"e8","sourceId":"filing-2","location":"Commitments and Contingencies—Infrastructure spending","excerpt":"Additionally, we have committed to expend no less than $75 million (approximately $23 million of which has been incurred as of June 30, 2026), over a projected 12-year period, in healthcare infrastructure including expenditures related to the District Facilities as well as other healthcare related expenditures in certain specified areas of Washington, D.C."},{"id":"e9","sourceId":"filing-2","location":"Commitments and Contingencies—Termination obligations","excerpt":"Pursuant to the agreements, the District is entitled to certain termination fees and other amounts as specified in the agreements in the event we, within certain specified periods of time, cease to operate the acute care hospital or there is a transfer of control of us or our subsidiary operating the hospital."},{"id":"e10","sourceId":"filing-1","location":"Risk Factors—Limits on reimbursement increases","excerpt":"Further, given the complexities of the reimbursement landscape in which we operate, our ability to pass on increased costs associated with providing healthcare to Medicare and Medicaid patients is limited due to various federal, state and local laws, which in certain circumstances, limit our ability to increase prices, commercial payers may be unwilling or unable to increase reimbursement rates commensurate with the inflationary impacts on our costs."},{"id":"e11","sourceId":"filing-2","location":"Managed care—Payments and secured commercial price increases","excerpt":"Typically, we receive lower payments per patient from managed care payers than we do from traditional indemnity insurers, however, during the past few years we have secured price increases from many of our commercial payers including managed care companies."},{"id":"e12","sourceId":"filing-2","location":"Commercial Insurance—Negotiated reimbursement contracts","excerpt":"Private insurance reimbursement varies among payers and states and is generally based on contracts negotiated between the hospital and the payer."},{"id":"e13","sourceId":"filing-2","location":"Commercial Insurance—Payer payment restrictions","excerpt":"Commercial insurers are continuing efforts to limit the payments for hospital services by adopting discounted payment mechanisms, including predetermined payment or DRG-based payment systems, for more inpatient and outpatient services."},{"id":"e14","sourceId":"filing-3","location":"Financial Highlights—2025 operating results and capital allocation","excerpt":"For the year ended December 31, Increase Financial Highlights (amounts in thousands except per share amounts) 2025 2024 Amount Percentage Consolidated net revenues $ 17,364,829 $ 15,827,935 $ 1,536,894 9.7 % Adjusted net income attributable to UHS (a.) $ 1,401,082 $ 1,128,135 $ 272,947 24.2 % Adjusted net income attributable to UHS, per diluted share (a.) $ 21.74 $ 16.61 $ 5.13 30.9 % Net revenues - Acute care services, same facility basis $ 9,323,647 $ 8,590,209 $ 733,438 8.5 % Net revenues - Behavioral health care services, same facility basis $ 7,185,336 $ 6,668,971 $ 516,365 7.7 % Capital expenditures - Acute care services $ 641,978 $ 652,347 $ (10,369 ) -1.6 % Capital expenditures - Behavioral health care services $ 358,252 $ 285,671 $ 72,581 25.4 % Repurchase of common shares pursuant to share repurchase program $ 899,275 $ 598,522 $ 300,753 50.2 % (a) Adjusted net income and adjusted net income per diluted share (each being are a non-GAAP financial measure) for 2025 and 2024 were publicly disclosed and reconciled to our reported results for each year on the Schedule of Non-GAAP Supplemental Information, included with our earnings for the years ended December 31, 2025 and 2024, attached as Exhibit 99.1 to our Current Report on Form 8-K furnished with the SEC on February 26, 2026 (which exhibit is not incorporated by reference in, and is not part of, this proxy statement)."},{"id":"e15","sourceId":"filing-2","location":"Commitments and Contingencies—Less favorable insurance terms","excerpt":"Effective March, 2025, our commercial insurance coverage contains less favorable terms than previous years including coverage exclusions for incidents involving sexual molestation or abuse, higher premiums and lower aggregate limitations."},{"id":"e16","sourceId":"filing-2","location":"Medicaid legislation—Estimated future net-benefit reduction","excerpt":"Under current law, and based on our current expectations, we estimate that, commencing with the 2028 state fiscal years, our aggregate annual net benefit will be reduced, on an annually increasing and relatively pro rata basis, by approximately $500 million by 2032."},{"id":"e17","sourceId":"filing-2","location":"Financing risks—Realized interest expense and cash-flow pressure","excerpt":"However, significant increases in these physician related expenses could have a material unfavorable impact on our future results of operations; • the increase in interest rates during the past few years has increased our interest expense significantly, increasing our expenses and reducing our free cash flow and our ability to access the capital markets on favorable terms."},{"id":"e18","sourceId":"filing-1","location":"Credit Agreement—Covenant compliance","excerpt":"We were in compliance with all required covenants as of December 31, 2025 and December 31, 2024."},{"id":"e19","sourceId":"filing-2","location":"Miller Medical Center—Completed hospital opening","excerpt":"Miller Medical Center, a newly constructed acute care hospital owned and operated by a wholly-owned subsidiary of ours, which was completed and opened during the second quarter of 2026."},{"id":"e20","sourceId":"filing-3","location":"Executive Compensation—2025 incentive targets, results and exclusions","excerpt":"Corporate performance criteria Target ranges for the Actual achieved year ended 12/31/2025 for the year Minimum Target Maximum ended 12/31/2025 Cash incentive award 14 % 100 % 200 % 200 % Adjusted net income attributable to UHS, per diluted share $ 17.28 $ 19.20 $ 21.12 $ 21.74 Return on capital 9.9 % 11.0 % 12.1 % 12.1 % The adjusted net income attributable to UHS per diluted share excludes, among potentially other things, if applicable and material and/or nonrecurring or non-operational in nature, the impact of changes in the market value of shares of certain non-marketable and marketable securities, the impact on our provision for income taxes recorded pursuant to \"ASU 2016-09\", Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting, net of the impact of executive compensation limitations pursuant to IRC section 162(m), impairments of goodwill, long-lived and intangible assets, reserves for various matters including settlements, legal judgments and lawsuits, costs related to extinguishment of debt, gains/losses on sales of assets and businesses and other amounts that may be reflected in the current year financial statements that related to prior periods."},{"id":"e21","sourceId":"filing-3","location":"Executive Compensation—2025 equity grants and vesting terms","excerpt":"The pre-established target ranges applicable to the PBRSUs granted to our NEOs during each of the last three years provide for the following: Target ranges for PBRSUs Minimum Target Maximum Percentage of Target PBRSUs awarded 50 % 100 % 150 % Target range of Adjusted EBITDA net of NCI 90 % 100 % 110 % On March 19, 2025, our Compensation Committee awarded the following to our NEOs: • Time-based RSUs that are scheduled to vest in four equal installments on the first, second, third and fourth anniversaries of the grant date, and; • PBRSUs (awarded at target) that will be earned pursuant to the pre-established target range of Adjusted EBITDA net of NCI, as discussed above."},{"id":"e22","sourceId":"filing-3","location":"Executive Compensation—2023 performance awards earned and vested","excerpt":"Vesting of PBRSUs Granted in 2023 (\"2023 PBRSUs): The pre-established 3-year target range of Adjusted EBITDA net of NCI applicable to the 2023 PBRSUs (granted in March, 2023), and our actual Adjusted EBITDA net of NCI for the year ended December 31, 2025, were as follows: Target range for 2023 PBRSUs Actual Minimum Target Maximum achieved Percentage of Target PBRSUs awarded 50 % 100 % 150 % 150 % Adjusted EBITDA net of NCI, as percentage of target 90 % 100 % 110 % 147 % 2025 Adjusted EBITDA net of NCI (in thousands)(b.) $ 1,583,866 $ 1,759,851 $ 1,935,836 $ 2,590,372 In connection with the 2023 PBRSUs, on March 12, 2026, our Compensation Committee determined that, based upon our 2025 actual operating results, 110% (the maximum) of the target Adjusted EBITDA net of NCI had been exceeded and therefore 150% of the target 2023 PBRSUs were earned and vested for each eligible NEO as follows: Target Percentage Actual 2023 2023 PBRSUs of target PBRSUs earned awarded achieved and vested Marc D."},{"id":"e23","sourceId":"filing-3","location":"Corporate Governance—Compensation Committee independence","excerpt":"All the members of the Compensation Committee are independent directors and no member has ever been one of our officers or employees or had a relationship with us that required disclosure."},{"id":"e24","sourceId":"filing-3","location":"Corporate Governance—Director nomination exemption","excerpt":"We have elected to avail ourselves of a limited aspect of the Rule 303A exemption, determining that the Nominating & Governance Committee is not responsible for identifying and recommending qualified candidates for Board positions that, in accordance with our Restated Certificate of Incorporation, are to be elected by the holders of Class A and Class C Common Stock of the Company."},{"id":"e25","sourceId":"filing-2","location":"Other Related Party Transactions—Director's law firm engagement","excerpt":"A member of our Board of Directors and member of the Executive Committee and Finance Committee is Of Counsel to Norton Rose Fulbright US LLP, a law firm engaged by us for a variety of legal services."},{"id":"e26","sourceId":"filing-2","location":"Other Related Party Transactions—Executive Chairman's personal legal and trust relationships","excerpt":"The Board member and his law firm also provide personal legal services to our Executive Chairman and he acts as trustee of certain trusts for the benefit of our Executive Chairman and his family."},{"id":"e27","sourceId":"filing-3","location":"Executive Compensation—Estimated contractual CEO termination benefits","excerpt":"Marc Miller for “Breach by the Company” or Termination by the Company Without Cause $ 12,170,419 (b.) $ 515,078 (c.) $ 7,912,616 $ 35,908,330 $ 56,506,443 (a) Based upon 50% of the targeted 2026 non-equity incentive plan bonus award and 50% (6 months) of Mr."},{"id":"e28","sourceId":"filing-1","location":"Risk Factors—United Kingdom competition","excerpt":"In addition to the NHS, we face competition in the United Kingdom from independent sector providers and other publicly funded entities for patients."},{"id":"e29","sourceId":"filing-3","location":"Executive Compensation—Compensation peer identification","excerpt":"· Tenet Healthcare Corporation We believe these compensation peer group companies are comparable to us based upon the median revenues of approximately $12.7 billion in 2025, as compared to our 2025 revenues of approximately $17.4 billion."}],"changes":["No comparable previous version was supplied."],"limitations":["Assessment uses only supplied passages. Source dates are filing dates: February 25, August 7 and April 9, 2026; they are not retrieval dates.","The none verdict reflects affirmative evidence of comparable alternatives and portable physician affiliations. It does not establish that every individual hospital lacks a local advantage.","Domestic competitors are described generically. NHS is expressly identified in UK competition disclosures; Tenet Healthcare Corporation appears as a compensation peer, which does not establish direct market competition. Geographic competitor coverage remains incomplete.","Reported commercial price increases lack quantified rate, mix, volume and payer-retention detail. Same-facility revenue growth cannot independently establish patient retention or pricing power.","Operating results, contracts and compensation outcomes are issuer disclosures. Adjusted earnings and return on capital use issuer-defined adjustments; the supplied passages do not establish sustained excess returns relative to competitors.","The proxy supplies actual compensation grants, vesting and governance disclosures, but not sufficient beneficial ownership or voting-control detail to assess management ownership alignment fully.","The estimated Medicaid net-benefit reduction is a forward-looking issuer estimate, not an already realized loss. The proposed acquisition's synergies are not demonstrated operating advantages."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":1,"rationale":"A nominal-rent lease offers a limited contractual benefit, but comparable services exist throughout UHS markets and competing facility supply has increased. No company-wide structural protection is demonstrated.","evidenceIds":["e1","e2","e6","e8"]},{"criterion":"durability","grade":1,"rationale":"The lease has a long contractual term, but physician affiliations can end at any time and its net economic benefit remains subject to substantial obligations. Durable enterprise-wide superiority is weakly supported.","evidenceIds":["e4","e6","e7","e8","e9"]},{"criterion":"customer_dependency","grade":1,"rationale":"Comparable local services and physicians with privileges elsewhere indicate weak referral switching friction. This is indirect evidence about patient dependency; no patient retention rate is disclosed.","evidenceIds":["e1","e3","e4"]},{"criterion":"erosion_resilience","grade":2,"rationale":"2025 revenue and adjusted earnings growth demonstrate operating resilience despite competition. Worsened insurance terms and realized borrowing-cost pressure, together with prospective Medicaid reductions, limit confidence in enduring protection.","evidenceIds":["e14","e15","e16","e17"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":2,"rationale":"UHS reports securing increases from many commercial payers over several years, demonstrating realized negotiating ability. Magnitudes and mix effects are absent, managed care payments are lower than traditional indemnity payments, and regulated reimbursement limits broader pricing power.","evidenceIds":["e10","e11","e12"]},{"criterion":"retention","grade":2,"rationale":"Same-facility revenue growth in both operating segments indirectly supports continuing demand. Revenue combines price, mix and utilization, so it does not establish repeat patient retention or payer renewals; physician affiliations remain portable.","evidenceIds":["e14","e3","e4"]},{"criterion":"margin_resilience","grade":2,"rationale":"Adjusted net income grew faster than revenue in 2025, supporting realized earnings resilience. This does not isolate pricing contributions or establish a moat; actual financing and insurance pressures and restricted cost pass-through temper the result.","evidenceIds":["e14","e15","e17","e10"]},{"criterion":"contractual_freedom","grade":1,"rationale":"Commercial reimbursement is negotiated with payers pursuing discounted payment mechanisms, while laws restrict Medicare and Medicaid price increases. These are substantive limits on unilateral pricing freedom.","evidenceIds":["e10","e12","e13"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":2,"rationale":"Disclosed capital expenditures, repurchases, covenant compliance and achieved return on capital support an assessable allocation record. Financing costs have reduced free cash flow, and infrastructure commitments remain outstanding. Cash-generation coverage and incremental investment returns are insufficiently disclosed to establish strong discipline.","evidenceIds":["e14","e18","e20","e17","e8"]},{"criterion":"incentive_alignment","grade":2,"rationale":"Actual equity awards include multiyear vesting and performance conditions, and 2023 awards demonstrably vested after targets were exceeded. Adjusted metrics exclude several costs, while substantial contractual termination benefits weaken downside alignment. Ownership alignment remains unestablished.","evidenceIds":["e20","e21","e22","e27"]},{"criterion":"execution","grade":3,"rationale":"Revenue and adjusted earnings growth, achieved financial targets and completed hospital openings provide strong demonstrated execution evidence. This relies on issuer-reported operating and delivery outcomes, not proof of superior clinical outcomes or successful acquisition integration.","evidenceIds":["e14","e20","e5","e19"]},{"criterion":"governance","grade":2,"rationale":"An independent Compensation Committee supplies a substantive oversight safeguard. A director nomination exemption and a director's simultaneous company, Executive Chairman and family-trust legal relationships create countervailing accountability and conflict concerns, without establishing misconduct.","evidenceIds":["e23","e24","e25","e26"]}]}],"qualityPolicy":"quality-scores-2","basisHash":"86d69d5b2f2b32d45bc19c92169c6fb4d0ff4afb4beaaf39072dc90004a90f10","updatedAt":"2026-10-18T01:13:01.510Z","sources":[{"id":"filing-1","url":"https://www.sec.gov/Archives/edgar/data/352915/000119312526071676/uhs-20251231.htm","publishedAt":"2026-02-25","sha256":"6d7c8a4149fe458f4608f691d6e7bb28e40cac9beca99643dff3eb8d80f0fc48","dateKind":"filed"},{"id":"filing-2","url":"https://www.sec.gov/Archives/edgar/data/352915/000119312526340278/uhs-20260630.htm","publishedAt":"2026-08-07","sha256":"1a4f00decb48dd4c40425e119f2336ffa442da113baaf2f0f86d1fddccbb3665","dateKind":"filed"},{"id":"filing-3","url":"https://www.sec.gov/Archives/edgar/data/352915/000119312526148814/uhs-20260403.htm","publishedAt":"2026-04-09","sha256":"545791d4d0aacad4d248e4d2def840a02ac74d6f18968e7e414d4a368a68dd0f","dateKind":"filed"}],"model":"gpt-6.1-sol","providerId":"codex:05fb06f51c65dba7d7377e9b3563f7a25726da5d676f61e27af01fc1a6b9405e","usage":{"input_tokens":53464,"cached_input_tokens":20992,"cache_write_input_tokens":0,"output_tokens":3003,"reasoning_output_tokens":150}},"signals":[{"period":"2021","end":"2021-12-31","values":{"gross_margin":null,"operating_margin":10.782165676840357,"roic":10.785746791977537,"fcf_margin":0.221766655062598,"sbc_revenue":0.5828612407241603},"issues":{"pfcf_growth":"TTM FCF per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","gross_margin":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","roic_wacc":"Enter a WACC assumption from 0 to 100%."}},{"period":"2022","end":"2022-12-31","values":{"gross_margin":null,"operating_margin":7.489568539416405,"roic":7.269921805952065,"fcf_margin":1.9554799964475944,"sbc_revenue":0.6371792106643819},"issues":{"peg":"TTM earnings per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","gross_margin":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","roic_wacc":"Enter a WACC assumption from 0 to 100%."}},{"period":"2023","end":"2023-12-31","values":{"gross_margin":null,"operating_margin":8.22982057944923,"roic":8.301082223104245,"fcf_margin":3.674155452998941,"sbc_revenue":0.6142007240454682},"issues":{"software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","gross_margin":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","roic_wacc":"Enter a WACC assumption from 0 to 100%."}},{"period":"2024","end":"2024-12-31","values":{"gross_margin":null,"operating_margin":10.625605930274544,"roic":11.808444148366748,"fcf_margin":7.096889139360253,"sbc_revenue":0.6276813747339751},"issues":{"software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","gross_margin":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","roic_wacc":"Enter a WACC assumption from 0 to 100%."}},{"period":"2025","end":"2025-12-31","values":{"gross_margin":null,"operating_margin":11.483067296545217,"roic":13.239478642346317,"fcf_margin":4.890603875223879,"sbc_revenue":0.5510448735199177},"issues":{"pfcf_growth":"TTM FCF per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","gross_margin":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","roic_wacc":"Enter a WACC assumption from 0 to 100%."}}],"sources":[{"id":"filing-1","url":"https://www.sec.gov/Archives/edgar/data/352915/000119312526071676/uhs-20251231.htm","publishedAt":"2026-02-25","sha256":"6d7c8a4149fe458f4608f691d6e7bb28e40cac9beca99643dff3eb8d80f0fc48","dateKind":"filed"},{"id":"filing-2","url":"https://www.sec.gov/Archives/edgar/data/352915/000119312526340278/uhs-20260630.htm","publishedAt":"2026-08-07","sha256":"1a4f00decb48dd4c40425e119f2336ffa442da113baaf2f0f86d1fddccbb3665","dateKind":"filed"},{"id":"filing-3","url":"https://www.sec.gov/Archives/edgar/data/352915/000119312526148814/uhs-20260403.htm","publishedAt":"2026-04-09","sha256":"545791d4d0aacad4d248e4d2def840a02ac74d6f18968e7e414d4a368a68dd0f","dateKind":"filed"}],"history":[{"version":3,"updatedAt":"2026-10-18T16:35:43.872Z","verdict":"none","value":null},{"version":2,"updatedAt":"2026-10-18T02:27:49.793Z","verdict":"none","value":null},{"version":1,"updatedAt":"2026-10-18T02:18:02.026Z","verdict":null,"value":null}],"hasRequested":false,"requestStatus":"completed","researchIssue":null,"archivedMoat":null,"scope":"supported_catalog"}