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Is National HealthCare (NHC) Still Cheap After Its Strong Run Higher?

Simply Wall St · 1d ago

National HealthCare (NHC) drew fresh attention after recent trading left the shares at US$224.92. The healthcare operator now carries a market value of about US$3.56b and a value score of 2.

The share price has eased over the last day but still shows a 7-day share price return of 1.5% and a 90-day gain of 13.8%. National HealthCare’s 1-year total shareholder return of 98.4% and 5-year total shareholder return of 273.3% indicate strong, sustained momentum.

Scan beyond National HealthCare and review other potential movers with our hand-picked 31 high quality undervalued stocks that combine momentum with underlying business strength.

Bulls point to National HealthCare’s recent surge and value score, while bears question whether the run-up already captures the good news. The numbers behind that 48.6% intrinsic discount now take center stage.

Price-to-Earnings of 25.1x: Is it justified?

On a simple headline check, National HealthCare trades on a P/E of 25.1x, which looks slightly expensive compared to both its industry and peer averages.

The P/E multiple compares what investors are currently paying for each dollar of earnings. For a healthcare operator like National HealthCare, it often reflects expectations around the stability of profits, the reliability of cash flows from long term care services, and how durable those earnings might be over time.

Earnings growth of 33.8% over the past year, improving net profit margins from 7.2% to 9%, and an earnings track record of 4.2% per year over five years help explain why the market is willing to pay a higher multiple. At the same time, a 12.7% return on equity is described as low, which suggests the current P/E is building in a fair amount of optimism about how profit quality and reinvestment will translate into future returns.

Compared with the wider US Healthcare group at 25x and a peer average of 23.7x, National HealthCare carries a premium valuation. The difference is small against the sector but more meaningful against direct peers, hinting that investors are assigning extra value to its earnings growth acceleration and high quality earnings profile.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 25.1x (OVERVALUED)

Still, the National HealthCare story could be challenged if profitability metrics stall at current levels, or if reimbursement pressures squeeze returns from its US$1.56b revenue base.

Find out about the key risks to this National HealthCare narrative.

Another View on National HealthCare’s Value

The P/E screen paints National HealthCare as expensive, yet the SWS DCF model points the other way. On that cash flow view, the shares at $224.92 trade at roughly a 48.6% discount to an estimated value of $437.57, which raises a different question. Is the market underpricing the staying power of those earnings, or is the model assuming too much?

Look into how the SWS DCF model arrives at its fair value.

NHC Discounted Cash Flow as at Sep 2026
NHC Discounted Cash Flow as at Sep 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out National HealthCare for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 31 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Sentiment on National HealthCare is clearly mixed, with investors weighing both bright spots and pressure points. Move quickly, review the underlying numbers for yourself, and then weigh up the 2 key rewards and 1 important warning sign

Looking for more National HealthCare investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.