Community Health Systems' hospital divestiture streak likely isn't over

Editor's note: This story has been updated with commentary from Community Health Systems' quarterly earnings call.

Despite a string of recent selloffs, executives told analysts Thursday that hospital deals are still likely on the table for Community Health Systems in 2026. 

The Franklin, Tennessee-based for-profit, currently owns or leases 65 affiliated hospitals. It's cut down its portfolio by about 35% since 2019, with a string of divestitures announced or executed in the past handful of months alone. 

The dealmaking has helped the company turn its first cashflow-positive year in some time, and is fueling both increased investment into CHS' remaining core hospitals as well as efforts to deleverage. 

As of the end-of-year earnings call, Kevin Hammons, CHS director and CEO, told curious analysts that the company is "getting closer to the end of our programmatic divestitures," but that it was still in the "early stages of discussions" for "a couple transactions" that aren't guaranteed reach the finish line. CHS is still getting inbound interest on some of its other hospitals in strong markets, he said, but the company is less eager to let those facilities go.

"We're very comfortable with our portfolio as it stands, and we really want to be just opportunistic about transacting hospitals," Hammons said. "If there were ever to be a change in the economic environment ... that would cause us to want to make a decision to divest, or if it's just an opportunistic transaction at a price point that would allow us to materially deleverage, then I think we would want to take advantage of that." 

Hammons also noted that CHS' divestitures, to date, have focused more on offloading standalone hospitals rather than those that are part of a network and serve as an access or transfer point for higher acuity care. 

On Wednesday afternoon, CHS released fourth quarter numbers that executives said matched their projections and, as opposed to previous years' struggles, place the hospital operator on a stronger path for 2026. 

The company logged $3.14 billion in total net operating revenues during the quarter, right in line with investors’ expectations. This was a 4.9% decline from the prior year but a 2.1% increase when comparing business across the facilities CHS held on to. 

Net income attributable to stockholders was $110 million ($0.81 per diluted share), up from the fourth quarter of 2024’s $70 million net loss (-$0.53 per diluted share) and a slight beat over Wall Street’s consensus estimate. Excluding adjusting items, such as gains due to divestments, left attributable net income at $0, still an improvement over the prior year’s -$0.42 net loss per diluted share. 

However, CHS’ adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $395 million was a decline from the fourth quarter of 2024’s $428 million. CHS, in its earnings release, attributed the slip to reduced volumes (same-store admissions and adjusted admissions fell by 0.3%) and net benefit from supplemental reimbursement programs, though those were partially offset by 2025’s increased reimbursement rates. 

As for the year, CHS reported $12.49 billion of total net operating revenues, which was a 1.2% decrease from the prior year’s $12.63 billion but a 4.6% increase when comparing on a same-store basis. Admissions and adjusted admissions fell by a respective 5.4% and 6.3% but rose on a same-store basis by 1.5% and 0.6%. 

Executives also noted successful efforts to control cost growth, particularly labor costs, but acknowledged that medical specialist fees are likely to face continued upward pressure in 2026. 

2025’s net income attributable to stockholders was $509 million ($3.77 per diluted share), a reversal of the prior year’s $516 million net loss (-$3.90 per diluted share). After adjustment, both years’ numbers shrank to $1.19 per diluted share and -$1.03 per diluted share. 

Adjusted EBITDA for the recently closed year was $1.53 billion, slightly behind 2024’s $1.54 billion. CHS pointed to lower acuity and heightened medical specialist fees for the step back—but on the whole, celebrated the company's first year of positive free cash flow in some time.

Hammons, in a release, said the company was “pleased to deliver financial and operating results consistent with our expectations, and to enter 2026 with solid momentum and an improved financial position. In addition, our clinical staff and leaders are rallying behind our shared vision—to make the healthcare experience exceptional for our patients, our communities, and each other—and we are putting our values into action.”

For the coming year, CHS is projecting net operating revenues between $11.6 billion and $12 billion, adjusted EBITDA between $1.34 billion and $1.49 billion, and a net loss per diluted share of $0.60 to $0.00. The guidance, which assumes low-single-digit same-store volume growth, does not include any impacts from state-directed payment programs still awaiting approval, or anticipated benefits from the Rural Health Transformation Program. 

What was included is the ambiguous impact of exchange plan disenrollments expected during the year due to policy change. 

CFO Jason Johnson, during Thursday's earnings call, said that exchanges currently represent less than 5% of CHS' total adjusted admissions and net revenue. While acknowledging the difficulty in predicting affected consumers' coverage-seeking behaviors, the company is starting with a 20% reduction in fixed volumes, with subsequent $100 million to $120 million net revenue reductions and a $20 million to $30 million reduction in EBITDA.

The company’s stock was down slightly in Wednesday’s after-hours trading, but is back at that day's close as of Thursday afternoon. CHS' muted performance comes in the wake of particularly strong quarters and upbeat 2026 outlooks from for-profit peers HCA Healthcare and Tenet Health.