Nutex Health Inc. (NUTX): A Bull Case Theory 

We came across a bullish thesis on Nutex Health Inc. on Buffetts Disciple’s Substack by Aled. In this article, we will summarize the bulls’ thesis on NUTX. Nutex Health Inc.’s share was trading at $149.80 as of January 28th. NUTX’s trailing P/E was 7.28 according to Yahoo Finance.

Nutex Health Inc. ($NUTX) is a healthcare operator specializing in microhospitals—small, highly focused facilities providing urgent care, imaging, and surgical services 24/7. This model allows Nutex to treat roughly 95% of patient cases while minimizing costs and avoiding in-network insurance, resulting in lower overhead and higher hospital-rate pricing. Physicians are incentivized through joint ventures, owning portions of the hospitals, which aligns their interests with patient outcomes and operational efficiency.

Despite regulatory headwinds from the No Surprise Act (NSA) implemented in 2022, which initially reduced revenue by 30%, Nutex successfully leveraged independent dispute resolution (IDR) arbitration to recover appropriate payments. Partnering with HaloMD, Nutex now submits 60–70% of claims, winning approximately 80% and achieving 200–300% higher payouts, driving a 200%+ year-over-year revenue increase. Current quarterly revenues are $220–240M, with net income around $25M, translating to $100M annualized, and the company is steadily expanding its hospital network at 2–4 per year.

Financially, Nutex maintains a strong balance sheet with $96M cash, $20M debt, and a tangible book value of $167M, giving it net cash of ~$70M and an enterprise value near $500M. CEO Tom Vo owns 32.65% of the company, demonstrating alignment with shareholders. While the business is fundamentally strong, uncertainties remain due to regulatory nuances preventing Nutex from suing certain insurers and prior accounting missteps with 10-Q filings.

At current valuations (~6x earnings), the stock is materially undervalued compared to peers like Tenet Healthcare, suggesting potential upside if these binary risks resolve. Despite the promising narrative, the combination of regulatory and collection risks leads the author to sit out, though the business model, IDR recovery success, and long-term demand for healthcare support a compelling investment case should the risks abate.

Previously we covered a bullish thesis on Tenet Healthcare Corporation (THC) by BlackSwanInvestor in December 2024, which highlighted the company’s operational efficiency, Ambulatory Care expansion, debt reduction, and strong free cash flow. The company’s stock price has appreciated approximately by 50.81% since our coverage. The thesis still stands as Tenet continues optimizing operations. Aled shares a similar focus but emphasizes Nutex Health’s microhospital model and regulatory arbitration success.

Nutex Health Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 5 hedge fund portfolios held NUTX at the end of the third quarter which was 9 in the previous quarter. While we acknowledge the risk and potential of NUTX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NUTX and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.