Mouwasat Medical Services Company Battles the Expansion Fever

As part of its Vision 2030 goals, Saudi Arabia is shifting from a government-run system to a private-sector powerhouse. This massive wave of investment is creating a gold rush for established players such as Mouwasat. The company is capitalizing on this momentum by expanding its footprint into major cities and pivoting toward high-value specialized care.

Public health has become e a national mandate in Saudi Arabia. The region is putting its money where its mouth is when it comes to healthcare.

For FY 25, the Kingdom’s Ministry of Finance allocated a whopping SAR 260bn to the Health and Social Development sector, according to the official 2025 Budget Statement. The approved 2026 budget maintains a target of SAR 259bn, which is the highest allocation of any category across government sectors.

The impact on the economy is just as huge. Public and private healthcare spending for 2025 is estimated to hit SAR 250bn, which accounts for roughly 6% of Saudi Arabia's national GDP, according to the US-Saudi Business Council.

This high-growth environment is the perfect tailwind for Mouwasat. As a major private player, it is reaping the rewards of the government’s shift toward privatization and outsourcing.

By expanding into key hubs such as Riyadh and Jeddah, the company is tapping into this record-breaking spending and a market that is essentially being supercharged by Vision 2030’s focus on a private-sector-led economy.

The profit power-up

Mouwasat wrapped up FY 25 with total revenue hitting SAR 3.2bn, an 11.9% y/y jump from SAR 2.89bn. Even better, net profit surged a 27.3% y/y to SAR 822.0m. The company’s core medical services did the heavy lifting, with segment revenue climbing 12.7% y/y to SAR 2.7bn, driving about 90% of the group's total growth.

Operating profit hit SAR 880.3m (up 21.5% y/y), though the management is feeling the pinch from rising employee and drug costs. Their SAR 5.9bn asset base—the total value of its hospital portfolio—jumped 10.9% y/y.

While gross profit rose to SAR 1.3bn, margins dipped slightly to 42.25% due to pre-operating costs at the new Yanbu hospital.

Total patient visits across its hospitals climbed to 4.56 million in FY 25, a 5.8% y/y increase from the 4.31 million seen in FY 24. The company also got a lot more efficient at making those visits count; revenue per occupied bed grew about 4.2% y/y as the mix shifted toward higher-value surgeries and specialized treatments.

The dividend drip

At SAR 70.5, the stock has risen by 5.8% over the last 12 months, although it is still trading below its 52-week high of SAR 80.7.

The real story, though, is its valuation. With a forward P/E ratio of 17x for FY 26, it’s looking a lot cheaper than its 2-year historical average of 21.2x, suggesting that the stock is currently undervalued.

Analysts seem to agree. 5 out of the 10 covering the stock, have "Buy” ratings on it. Their average target price of SAR 89.2 represents 26% upside potential at present.

Toss in a dividend yield that’s expected to grow from 3.3% in FY 26 to a solid 3.8% by FY 28, the stock provides a steady return while the company pursues its growth strategy.

Bitter pill

Despite this upside, risks remain. Mouwasat is pouring significant capital into new facilities in places such as Riyadh, Jeddah, and Yanbu,  although these projects come with upfront costs for hiring and equipment, which can eat into profits. Then there’s the talent war. Finding and keeping top-tier doctors and nurses is getting pricey. Finding and keeping top-tier doctors and nurses is getting pricey, especially as competition intensifies in major cities.

Since the company heavily relies on insurance and government contracts (about 78% of its revenue), any change in reimbursement terms or delays in payments can mess with their cash flow.