Surgery Partners, Inc. (NASDAQ: SGRY), a prominent player in the healthcare sector, operates a vast network of surgical facilities across the United States. Specializing in non-emergency surgical procedures through its ambulatory surgery centers and surgical hospitals, the company is strategically positioned within the medical care facilities industry. For investors seeking exposure to the healthcare market, SGRY presents an intriguing opportunity, underscored by a compelling potential upside.
With a market capitalization of $2.04 billion, Surgery Partners is navigating a challenging environment characterized by a current stock price of $15.75. This reflects a slight decrease of 0.01% from its previous closing, yet the stock sits close to its 52-week low of $15.06, suggesting potential for future growth, particularly as the stock has traded as high as $25.87 over the past year.
A key consideration for investors is the company’s valuation metrics. While the trailing P/E ratio and PEG ratio are unavailable, the forward P/E ratio stands at 22.88. This indicates that the market anticipates future earnings growth, albeit with an eye toward improvement in profitability metrics. Currently, SGRY reports an EPS of -1.36 and a modest return on equity of 0.66%, reflecting operational challenges that the company is working to overcome.
Revenue growth is a bright spot, with a solid increase of 6.60%, demonstrating the company’s ability to expand its top line despite ongoing pressures in the healthcare sector. Notably, Surgery Partners enjoys a robust free cash flow of $131.26 million, providing a cushion for strategic investments and debt management without the burden of dividend payouts, as evidenced by a payout ratio of 0.00%.
Analyst sentiment towards Surgery Partners remains largely positive, with 9 buy ratings and no sell recommendations, complemented by 3 hold ratings. The consensus among analysts suggests a target price range of $18.00 to $33.00, highlighting an average price target of $25.45. This translates to a potential upside of 61.62% from the current price, an attractive prospect for growth-oriented investors.
Technical indicators provide additional insights into SGRY’s stock performance. The stock’s 50-day moving average of $17.95 and 200-day moving average of $21.20 suggest recent downward momentum, while an RSI of 48.10 indicates a neutral stance without significant overbought or oversold conditions. Meanwhile, the MACD and signal line both in negative territory reflect bearish sentiment, although the gap between these metrics is narrowing.
Surgery Partners continues to focus on expanding its footprint in the surgical facilities space, offering a diversified range of services across specialties such as orthopedics, ophthalmology, gastroenterology, and general surgery. Founded in 2004 and headquartered in Brentwood, Tennessee, the company also provides essential ancillary services, including multi-specialty physician practices and anesthesia services.
For investors seeking exposure to a healthcare company with significant growth potential, Surgery Partners, Inc. represents a compelling opportunity. While there are operational challenges to address, the combination of revenue growth, analyst support, and a promising upside potential positions SGRY as a stock worth watching closely in the evolving healthcare landscape.
