Surgery Partners, Inc. (NASDAQ: SGRY) has positioned itself as a significant player in the healthcare sector, specifically within the medical care facilities industry. Headquartered in Brentwood, Tennessee, the company operates an extensive network of surgical facilities across the United States, providing a wide range of non-emergency surgical services. This includes specialties like orthopedics, ophthalmology, gastroenterology, and more, supported by ancillary services such as anesthesia and urgent care.
With a current market capitalization of $2.8 billion, Surgery Partners is a formidable entity in the healthcare market. The company’s stock is currently priced at $21.87, slightly below its 50-day and 200-day moving averages of $22.39 and $22.60, respectively. Notably, the stock is trading closer to the lower end of its 52-week range of $19.30 to $33.03, suggesting potential room for growth as it moves towards the higher end of this spectrum.
Analyst sentiment provides a compelling case for potential investors. The stock has garnered nine buy ratings and three hold ratings, with no sell recommendations. The consensus target price averages at $30.82, indicating a substantial upside potential of approximately 40.92%. The target price range spans from $24.00 to $36.00, underscoring the positive outlook analysts hold for this healthcare provider.
Despite the positive analyst sentiment, some challenges need acknowledgment. The company’s earnings per share stand at -$1.43, reflecting a net income that is currently in the negative. This is a critical metric for investors to consider, as profitability remains a future goal rather than a present reality. The trailing P/E ratio is not available, which underscores the company’s current focus on growth and investment in infrastructure over immediate profitability.
Surgery Partners has shown resilience with a revenue growth of 8.40%, an encouraging sign of its operational strength and market demand for its services. Moreover, its free cash flow is reported at $162.3 million, indicating a healthy liquidity position that can support ongoing operations and potential expansions.
From a technical perspective, the stock’s Relative Strength Index (RSI) of 32.59 suggests it is approaching oversold territory, which might attract value investors looking for entry points. However, the MACD and Signal Line indicators both suggest a bearish trend, which potential investors should monitor closely.
While Surgery Partners does not currently offer a dividend, the absence of a dividend yield and payout ratio suggests that the company is reinvesting its earnings into growth initiatives. This strategy aligns with its operational focus on expanding its network of surgical facilities and enhancing its service offerings.
For investors seeking exposure to the healthcare sector, particularly in surgical and ancillary services, Surgery Partners presents an intriguing opportunity. The potential upside, as indicated by analyst targets, coupled with its strategic growth initiatives, positions the company as a potential growth stock. However, prospective investors should weigh the current lack of profitability and technical indicators against the promising revenue growth and analyst confidence in the company’s future performance.
