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Pediatrix Medical Group (MD)
NYSE:MD
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Pediatrix Medical Group
(NYSE:MD)
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Rating:54Neutral
Price Target:
$19.50
▲(3.61% Upside)
The score is held back primarily by weak/unclear cash-flow conversion in the most recent period and a sharp revenue decline, alongside bearish technical momentum. These are partially offset by improved leverage and a positive earnings call with modest EBITDA growth guidance and strong liquidity, plus a relatively low P/E valuation.
Positive Factors
Strong liquidity and low net leverage
Net leverage under 1x and a $375M cash balance provide durable financial flexibility to absorb reimbursement volatility, fund targeted buybacks, or invest in operations. Low leverage reduces refinancing risk and preserves optionality for capital allocation over the next several quarters.
Sustained adjusted EBITDA and constructive guidance
Record adjusted EBITDA in 2025 and a midpoint-guidance lift for 2026 indicate operational control and margin resilience. Steady EBITDA underpins internal funding for physician incentives, deleveraging, and selective reinvestment, improving the company's ability to navigate flat revenue.
Strategic operational growth initiatives
Targeted capability expansion (telemedicine, NICU, maternal‑fetal, OB hospital medicine) creates durable organic growth avenues and higher-acuity services that improve reimbursement mix. Built alongside physician alignment programs, these initiatives support sustainable same-unit revenue growth and retention.
Negative Factors
Sharp revenue decline in 2025
A ~45% drop in annual revenue materially erodes scale, weakens fixed-cost absorption, and undermines confidence in top-line durability. Even with EBITDA resilience, rebuilding scale will take time and constrains investment and margin expansion until volumes or pricing recover.
Collapse in cash-flow conversion (2025)
Reported operating and free cash flow collapsing to zero represents a major deterioration in cash conversion, raising earnings-quality concerns. Weak cash conversion limits internal financing for capex, buybacks, or debt reduction and increases reliance on existing liquidity if the trend persists.
Declining patient volumes and payer-mix risk
Near-term volume declines reduce revenue base and per-unit absorption. Management also flagged ACA subsidy and payer-mix uncertainty, so persistent enrollment or reimbursement shifts could structurally lower realizations and pressure margins across multiple quarters.
Pediatrix Medical Group (MD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.89B
Dividend YieldN/A
Average Volume (3M)636.83K
Price to Earnings (P/E)10.2
Beta (1Y)0.57
Revenue Growth-4.21%
EPS GrowthN/A
CountryUS
Employees4,120
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)0.50
Shares Outstanding85,877,390
10 Day Avg. Volume837,499
30 Day Avg. Volume636,832
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)2.11
Price to Sales (P/S)0.95
P/FCF Ratio7.22
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit3.84
Enterprise Value/Ebitda6.98
Forecast
1Y Price Target
$20.00Price Target Upside6.27% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)2.19
Revenue Forecast (FY)$1.96B
Pediatrix Medical Group Business Overview & Revenue Model
Company DescriptionPediatrix Medical Group, Inc., together with its subsidiaries, provides newborn, maternal-fetal, pediatric cardiology, and other pediatric subspecialty care services in the United States and Puerto Rico. It offers neonatal care services, such as clinical care to babies born prematurely or with complications within specific units at hospitals through neonatal physician subspecialists, neonatal nurse practitioners, and other pediatric clinicians. The company also provides maternal-fetal care services, including inpatient and office-based clinical care to expectant mothers and unborn babies through affiliated maternal-fetal medicine subspecialists, as well as obstetricians and other clinicians, including maternal-fetal nurse practitioners, certified nurse mid-wives, ultrasonographers, and genetic counselors. In addition, it offers pediatric cardiology care services comprising inpatient and office-based pediatric cardiology care of the fetus, infant, child, and adolescent patient with congenital heart defects and acquired heart disease, as well as adults with congenital heart defects through affiliated pediatric cardiologist subspecialists and other related clinical professionals; and specialized cardiac care to the fetus, neonatal and pediatric patients. Further, the company provides other pediatric subspecialty care services through pediatric subspecialists, such as pediatric intensivists, pediatric hospitalists, pediatric surgeons, and pediatric ophthalmologists, as well as pediatric ear, nose, and throat physicians; and support services in the areas of hospitals, primarily in the pediatric emergency rooms, labor and delivery areas, and nursery and pediatric departments. As of February 17, 2022, it operated a network of approximately 2,700 physicians. The company was formerly known as MEDNAX, Inc. and changed its name to Pediatrix Medical Group, Inc. in July 2022. Pediatrix Medical Group, Inc. was founded in 1979 and is based in Sunrise, Florida.
How the Company Makes MoneyPediatrix Medical Group generates revenue primarily through its healthcare services, billing insurance companies, government programs, and patients for the medical services provided. Key revenue streams include professional fees for consultations, inpatient and outpatient care, and specialized services in their pediatric subspecialties. The company also benefits from strategic partnerships with hospitals and healthcare systems, which can provide a steady stream of patients and referrals. Additionally, Pediatrix may receive reimbursements from both private and public payers, which are critical to their financial model, as well as payments for bundled services that encompass a range of pediatric health issues.
Pediatrix Medical Group Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented a generally positive operational and financial picture: strong adjusted EBITDA (Q4 $66M; FY $276M), improved pricing and same-unit growth, a healthy balance sheet (cash $375M; net leverage <1x), AR improvements, and new physician alignment programs. Offsetting items include a $26M revenue headwind from portfolio restructuring, patient volume declines (≈3%), a Q4 operating cash flow decline ($115M vs $135M), and uncertainty around the potential lapse of ACA subsidy effects on payer mix. Management provided a 2026 adjusted EBITDA target modestly above 2025 (midpoint ≈+5%) while guiding revenue flat at ~$1.9B and expecting smaller share repurchases; M&A is not assumed in the outlook. On balance, the positive financial results, strong liquidity, and clear strategic initiatives outweigh the headwinds and uncertainties discussed.Q4-2025 Updates
Positive Updates
Strong Adjusted EBITDA and Record Full Year
Q4 adjusted EBITDA of $66,000,000 (in line with upward guidance); full-year 2025 adjusted EBITDA of $276,000,000 (record practice bonuses noted). 2026 adjusted EBITDA guidance of $280,000,000 to $300,000,000 (midpoint ~5% above 2025).
Solid Same-Unit Pricing and Same-Unit Growth
Same-unit revenue grew ~4% year-over-year with same-unit pricing up just under 7%, driven by improved RCM cash collections, favorable payer mix, increased acuity (notably in neonatology), and higher contract administrative fees.
Healthy Balance Sheet and Liquidity
Ended quarter with $375,000,000 in cash and net debt just over $220,000,000, implying net leverage just under 1x. The company generated $115,000,000 in operating cash flow in Q4 and remains well-capitalized for investment.
Share Repurchase and Capital Deployment
Deployed $64,000,000 in the quarter to repurchase 2,900,000 shares, leaving ~83,000,000 shares outstanding. Company expects to remain opportunistic on buybacks, but guidance assumes a smaller repurchase program in 2026.
Physician Alignment and Talent Initiatives
Introduced multi-year stock price tracking element for physician cash bonuses (500+ physicians participating) and launched 'Pediatrix Partners' with 46 physician leaders receiving stock tracking grants to support quality, hospital relations, recruiting, retention and growth.
Improved AR and Cash Collections
Accounts receivable DSO improved to 42.8 days at year-end (down almost five days year-over-year), reflecting better cash collections after revenue cycle management transition efforts.
Clear Strategic Growth Opportunities
Management highlighted organic and capability-driven growth opportunities including telemedicine expansion, additional NICU and maternal-fetal medicine capacity, and scaling OB hospital medicine leveraging existing NICU/hospital relationships.
Negative Updates
Revenue Headwind from Portfolio Restructuring
Consolidated revenue decrease driven by net non-same-unit activity of $26,000,000 (portfolio restructuring), partially offset by acquisitions and organic growth. Full-year 2026 revenue is guided to approximately $1,900,000,000, in line with 2025 (flat year-over-year).
Declining Patient Volumes
Overall patient service volumes declined just under 3% in the quarter (NICU days down ~2%) with volume declines across all service lines; management attributed Q4 weakness in part to a tough year-ago comp.
Reduced Quarterly Operating Cash Flow
Operating cash flow decreased to $115,000,000 in Q4 from $135,000,000 in the prior year quarter (down $20,000,000), primarily due to decreases in cash flow from accounts payable and accrued/other liabilities.
Uncertainty Around ACA Subsidies and Payer Mix
Management flagged potential risk if ACA subsidy effects continue to lapse with no remedy; the impact on payer mix and volumes is difficult to quantify and could negatively affect results if enrollment or subsidy payment behaviors change.
Higher Variable Compensation and Near-Term G&A Pressures
On a same-unit basis, variable incentive compensation and salary & benefits increased in the quarter. G&A rose year-over-year in Q4 due to modest salary and travel increases, although full-year 2026 G&A is guided modestly lower ($230M–$240M vs $241M in 2025).
No M&A Embedded in Guidance
2026 guidance excludes any contribution from M&A. While management is opportunistic and receives inbound interest, the lack of assumed acquisitions in guidance limits near-term upside from inorganic growth.
Company Guidance
Management guided 2026 adjusted EBITDA of $280M–$300M (midpoint ≈5% above 2025 adjusted EBITDA of $276M; Q4 2025 adj. EBITDA was $66M) with full‑year revenue targeted at about $1.9B (flat vs. 2025). They project G&A of $230M–$240M versus $241M in 2025 (midpoint ≈20 basis‑point improvement as a percentage of revenue), expect Q1 to comprise roughly 17%–19% of full‑year adjusted EBITDA (historical Q1 range 17%–21%), and assume steady volume, acuity, and payer mix (overall flat volume and pricing); the outlook includes no M&A, contemplates smaller buybacks than the $64M (2.9M shares) in Q4 (≈83M shares outstanding), and flags a potential but unquantified downside if ACA subsidy coverage lapses, while noting a strong balance sheet (cash ~$375M; net debt just over $220M; net leverage just under 1x).Pediatrix Medical Group Financial Statement Overview
Summary
Mixed fundamentals: balance sheet metrics improved (lower leverage and stronger 2025 ROE), but 2025 revenue fell sharply and reported 2025 operating/free cash flow collapsed to zero, raising earnings-quality and sustainability concerns despite the reported return to profitability.Income Statement
Revenue was broadly stable from 2021–2024 (~$1.9B–$2.0B) but fell sharply in 2025 (annual revenue down ~45%), which materially weakens the growth profile. Profitability has also been volatile: losses in 2023–2024 were followed by a return to solid profitability in 2025 (net margin ~8.6%). However, several 2025 profitability fields appear inconsistent (e.g., gross profit and EBIT margin shown as 0%), which reduces confidence in margin quality despite the strong net income figure.54
Neutral
Balance Sheet
Leverage has improved meaningfully versus 2020–2021 (debt-to-equity falling from ~2.41x in 2020 and ~1.19x in 2021 to ~0.73x in 2025), which lowers financial risk. Equity has grown versus 2024 and returns on equity rebounded strongly in 2025 (~19%) after negative returns in 2023–2024. The main watch-out is that debt remains sizable in absolute dollars (~$635M in 2025), and profitability swings in prior years highlight that balance-sheet strength is still somewhat dependent on operating execution.66
Positive
Cash Flow
Cash generation was healthy in 2022–2024, with positive operating cash flow and free cash flow (2024 free cash flow ~$185M). In 2025, operating cash flow and free cash flow are reported as zero (with free cash flow growth at -100%), which is a major deterioration versus the prior trend and creates a clear sustainability concern. Given the strong reported 2025 net income, the lack of cash flow conversion also raises questions about earnings quality or data completeness for 2025.38
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.91B | 2.01B | 1.99B | 1.97B | 1.91B |
| Gross Profit | 471.88M | 454.34M | 421.56M | 467.03M | 513.24M |
| EBITDA | 252.91M | -28.37M | 29.89M | 156.70M | 236.10M |
| Net Income | 165.39M | -99.07M | -60.41M | 66.33M | 130.96M |
Balance Sheet | |||||
| Total Assets | 2.25B | 2.15B | 2.22B | 2.35B | 2.72B |
| Cash, Cash Equivalents and Short-Term Investments | 499.72M | 348.51M | 177.74M | 103.06M | 487.11M |
| Total Debt | 634.62M | 662.31M | 701.65M | 717.08M | 1.07B |
| Total Liabilities | 1.38B | 1.39B | 1.37B | 1.46B | 1.83B |
| Stockholders Equity | 865.85M | 764.94M | 849.06M | 891.63M | 896.49M |
Cash Flow | |||||
| Free Cash Flow | 252.63M | 184.55M | 104.00M | 137.23M | 44.49M |
| Operating Cash Flow | 271.09M | 206.57M | 137.32M | 166.94M | 76.74M |
| Investing Cash Flow | -18.30M | -35.41M | -48.18M | -56.95M | -53.07M |
| Financing Cash Flow | -107.49M | -14.48M | -25.71M | -487.55M | -760.12M |
Pediatrix Medical Group Technical Analysis
Negative
18.82
Price Trends
21.58
Negative
20.73
Negative
17.67
Positive
Market Momentum
-0.38
Positive
30.71
Neutral
56.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MD, the sentiment is Negative. The current price of 18.82 is below the 20-day moving average (MA) of 20.96, below the 50-day MA of 21.58, and above the 200-day MA of 17.67, indicating a neutral trend. The MACD of -0.38 indicates Positive momentum. The RSI at 30.71 is Neutral, neither overbought nor oversold. The STOCH value of 56.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MD.
Pediatrix Medical Group Risk Analysis
Pediatrix Medical Group disclosed 40 risk factors in its most recent earnings report. Pediatrix Medical Group reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pediatrix Medical Group Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.52B | 25.01 | 9.94% | 1.80% | 23.74% | -18.99% | |
73 Outperform | $1.43B | 24.80 | 11.69% | ― | 6.26% | -19.33% | |
65 Neutral | $2.02B | 18.73 | 5.57% | 1.69% | -22.96% | -59.35% | |
62 Neutral | $975.53M | 104.05 | 1.29% | ― | 68.17% | -85.42% | |
54 Neutral | $1.89B | 10.19 | 20.28% | ― | -4.21% | ― | |
52 Neutral | $1.55B | 20.61 | ― | ― | 15.48% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
MD
Pediatrix Medical Group
18.82
3.14
20.03%
HCSG
Healthcare Services
20.64
10.17
97.13%
NHC
National Healthcare
157.82
68.79
77.27%
SEM
Select Medical
15.01
-3.20
-17.57%
ASTH
Astrana Health
19.86
-14.73
-42.58%
AVAH
Aveanna Healthcare Holdings
7.34
3.20
77.29%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.