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Surgery Partners Inc. (SGRY)
:SGRY
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Surgery Partners
(NASDAQ:SGRY)
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Rating:57Neutral
Price Target:
$18.00
▲(3.39% Upside)
Surgery Partners' overall stock score is primarily impacted by its financial performance, which shows strong revenue growth but struggles with profitability. Technical indicators suggest a bearish trend, and valuation metrics are unattractive due to negative earnings. The earnings call provided mixed signals with growth in some areas but challenges in others. The appointment of a new COO is a positive corporate event, but its impact is limited in the short term.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective business operations, supporting long-term financial stability.
Partnership Expansion
The partnership enhances market presence and service offerings, potentially increasing patient volume and revenue streams.
Operational Efficiency
Improved cost management enhances profitability potential, allowing for better resource allocation and competitive positioning.
Negative Factors
Profitability Challenges
Ongoing net losses hinder financial flexibility and long-term growth potential, posing risks to sustainability and investor confidence.
Payer Mix Challenges
A declining commercial payer mix could pressure margins and revenue, impacting financial performance and strategic initiatives.
Regulatory Delays
Delays in facility approvals can slow growth and revenue generation, affecting the company's ability to capitalize on market opportunities.
Surgery Partners (SGRY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.22B
Dividend YieldN/A
Average Volume (3M)2.03M
Price to Earnings (P/E)―
Beta (1Y)1.16
Revenue Growth10.14%
EPS Growth-182.12%
CountryUS
Employees15,000
SectorHealthcare
Sector Strength45
IndustryMedical - Care Facilities
Share Statistics
EPS (TTM)0.13
Shares Outstanding129,341,780
10 Day Avg. Volume1,114,174
30 Day Avg. Volume2,034,539
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)1.49
Price to Sales (P/S)0.86
P/FCF Ratio12.73
Enterprise Value/Market Cap3.71
Enterprise Value/Revenue2.51
Enterprise Value/Gross Profit10.48
Enterprise Value/Ebitda10.10
Forecast
1Y Price Target
$26.60Price Target Upside52.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)0.66
Revenue Forecast (FY)$3.30B
Surgery Partners Business Overview & Revenue Model
Company DescriptionSurgery Partners, Inc. is a leading healthcare services company that specializes in the operation and management of surgical facilities, including ambulatory surgery centers (ASCs) and surgical hospitals. The company focuses on providing high-quality surgical care across various specialties, including orthopedics, pain management, and general surgery. Surgery Partners aims to enhance patient outcomes and streamline the surgical process through its innovative approach to healthcare delivery, leveraging technology and partnerships with physicians and healthcare providers.
How the Company Makes MoneySurgery Partners generates revenue primarily through its network of ambulatory surgery centers and surgical hospitals, which perform a wide range of surgical procedures. The company earns money through facility fees billed to patients' insurance providers, including Medicare and private payers, for the use of its facilities and services. Additionally, Surgery Partners benefits from partnerships with physicians, who may refer patients to its centers, thereby driving patient volume. The company also capitalizes on ancillary services such as anesthesia and post-operative care, which further contribute to its revenue streams. Furthermore, Surgery Partners may engage in strategic acquisitions of ASCs to expand its footprint and enhance its service offerings, thereby increasing its market share and financial performance.
Surgery Partners Earnings Call Summary
Earnings Call Date:Nov 10, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 02, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with solid revenue and EBITDA growth, strong performance in surgical cases, and significant capital deployment in growth areas. However, the company faces challenges with softer than expected volume growth, unfavorable payer mix changes, delayed capital deployment, and regulatory delays impacting new facilities. These challenges have led to a revision in full-year guidance.Q3-2025 Updates
Positive Updates
Revenue and EBITDA Growth
Net revenue was $821.5 million, up 6.6% year over year. Adjusted EBITDA was $136.4 million, up 6.1% year over year, with an adjusted EBITDA margin of 16.6%.
Strong Surgical Case Growth
The company performed over 166,000 surgical cases in the third quarter, representing a 2.1% growth. Significant growth in orthopedic procedures, with total joint surgeries in ASC facilities growing 16% in the third quarter and 23% year-to-date.
Capital Deployment in Growth
Approximately $71 million deployed for acquisitions, with a robust M&A pipeline of over $300 million in opportunities under active evaluation.
De Novo Facility Expansion
Two new de novo facilities opened in the third quarter, with nine under construction and more than a dozen in the development pipeline, primarily focused on higher acuity specialties like orthopedics.
Cost Management and Efficiency
Supply costs were down 70 basis points, and G&A expenses were reduced, reflecting lower stock-based and incentive-based compensation.
Negative Updates
Softer Than Expected Volume Growth
Same facility volume growth trailed internal expectations, prompting a revision of the fourth quarter outlook.
Payer Mix Challenges
Commercial payers represented 50.6% of revenues, down 160 basis points year over year, with governmental sources up 120 basis points.
Delayed Capital Deployment
Year-to-date capital deployment for acquisitions is below the target, impacting in-year earnings contributions.
Regulatory Delays in De Novo Facilities
Some newly opened de novo facilities have not reached breakeven due to construction and regulatory approval delays, creating near-term pressure on earnings.
Revised Full-Year Guidance
Full-year revenue guidance revised to $3.275 to $3.3 billion and adjusted EBITDA to $535 million to $540 million due to timing-related impacts of capital activity and cautious outlook on commercial payer mix and volume.
Company Guidance
During the third quarter of 2025, Surgery Partners reported net revenue of $821.5 million, marking a 6.6% increase year over year. The company achieved an adjusted EBITDA of $136.4 million, a 6.1% rise compared to the previous year, with an adjusted EBITDA margin of 16.6%. Same facility revenue grew by 6.3%, and the company completed over 166,000 surgical cases, exhibiting 2.1% growth. Notably, total joint surgeries in Ambulatory Surgery Center (ASC) facilities increased by 16% in the third quarter and 23% year-to-date. Despite these positive metrics, the company revised its full-year guidance, anticipating revenue between $3.275 billion and $3.3 billion and adjusted EBITDA between $535 million and $540 million, due to a softer-than-expected volume growth and payer mix changes, particularly a decline in commercial payers to 50.6% of revenues. Additionally, Surgery Partners deployed $71 million for acquisitions, divested interest in three ASCs at a combined enterprise value of $50 million, and maintained a robust M&A pipeline exceeding $300 million.Surgery Partners Financial Statement Overview
Summary
Surgery Partners shows strong revenue growth and improving operational efficiencies, but profitability remains a challenge with consistent net losses. The balance sheet shows improved leverage, but negative returns on equity are concerning. Cash flow generation is a bright spot, with positive growth and better cash flow ratios, indicating potential for future financial stability if profitability issues are addressed.Income Statement
Surgery Partners has shown consistent revenue growth, with a TTM revenue increase of 1.58% and a strong historical growth trajectory. However, the company is struggling with profitability, as indicated by negative net profit margins across the periods. The gross profit margin is stable around 23.9%, but the net loss impacts overall performance. EBIT and EBITDA margins are improving, suggesting operational efficiencies, but the net income remains negative.65
Positive
Balance Sheet
The company's debt-to-equity ratio has improved significantly in the TTM period, dropping to 0.21 from much higher levels in previous years, indicating better leverage management. However, the return on equity is negative, reflecting ongoing net losses. The equity ratio is stable, but the negative ROE is a concern for long-term equity growth.55
Neutral
Cash Flow
Surgery Partners has shown positive free cash flow growth of 10.72% in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio is positive, suggesting that cash flows are more robust than net income figures. However, the free cash flow to net income ratio is low, reflecting the impact of net losses on cash flow metrics.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.29B | 3.11B | 2.74B | 2.54B | 2.23B | 1.86B |
| Gross Profit | 786.40M | 745.60M | 647.50M | 574.90M | 491.40M | 379.80M |
| EBITDA | 816.60M | 501.40M | 446.10M | 460.00M | 401.00M | 277.80M |
| Net Income | -171.40M | -168.10M | -11.90M | -54.60M | -70.90M | -116.10M |
Balance Sheet | ||||||
| Total Assets | 7.95B | 7.89B | 6.88B | 6.68B | 6.12B | 5.41B |
| Cash, Cash Equivalents and Short-Term Investments | 203.40M | 269.50M | 195.90M | 282.90M | 389.90M | 317.90M |
| Total Debt | 3.87B | 3.70B | 3.06B | 2.93B | 3.29B | 3.20B |
| Total Liabilities | 4.39B | 4.25B | 3.51B | 3.40B | 3.82B | 3.79B |
| Stockholders Equity | 1.73B | 1.79B | 1.99B | 2.00B | 1.09B | 550.10M |
Cash Flow | ||||||
| Free Cash Flow | 194.10M | 209.70M | 205.00M | 78.20M | 29.50M | 204.00M |
| Operating Cash Flow | 282.30M | 300.10M | 293.80M | 158.80M | 87.10M | 246.90M |
| Investing Cash Flow | -232.20M | -488.50M | -225.60M | -307.90M | -331.70M | -88.40M |
| Financing Cash Flow | -68.50M | 262.00M | -155.20M | 42.10M | 316.30M | 66.70M |
Surgery Partners Technical Analysis
Neutral
17.41
Price Trends
19.24
Negative
20.78
Negative
21.75
Negative
Market Momentum
-0.60
Negative
47.61
Neutral
71.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGRY, the sentiment is Neutral. The current price of 17.41 is above the 20-day moving average (MA) of 16.31, below the 50-day MA of 19.24, and below the 200-day MA of 21.75, indicating a neutral trend. The MACD of -0.60 indicates Negative momentum. The RSI at 47.61 is Neutral, neither overbought nor oversold. The STOCH value of 71.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SGRY.
Surgery Partners Risk Analysis
Surgery Partners disclosed 41 risk factors in its most recent earnings report. Surgery Partners reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Surgery Partners Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.09B | 20.79 | 9.94% | 1.89% | 23.74% | -18.99% | |
74 Outperform | $14.70B | 10.98 | 19.97% | 0.35% | 10.21% | 39.58% | |
74 Outperform | $18.46B | 14.14 | 34.51% | ― | -0.56% | -53.50% | |
70 Neutral | $111.06B | 18.81 | ― | 0.58% | 6.82% | 15.82% | |
64 Neutral | $11.32B | 21.26 | 24.94% | 0.65% | 11.13% | 27.53% | |
57 Neutral | $2.22B | ― | -9.45% | ― | 10.14% | -182.12% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
SGRY
Surgery Partners
17.41
-4.14
-19.21%
HCA
HCA Healthcare
488.50
174.27
55.46%
EHC
Encompass Health
108.04
7.40
7.35%
NHC
National Healthcare
133.84
14.17
11.84%
THC
Tenet Healthcare
202.00
62.90
45.22%
UHS
Universal Health
225.35
34.44
18.04%
Surgery Partners Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Surgery Partners Appoints New COO and President
Positive
Nov 12, 2025
On November 12, 2025, Surgery Partners, Inc. announced the appointment of Justin Oppenheimer as Chief Operating Officer and National Group President, effective January 1, 2026. Oppenheimer brings a wealth of experience from his previous roles at the Hospital for Special Surgery, which may enhance Surgery Partners’ operational capabilities and strategic positioning in the healthcare sector.
Executive/Board Changes
Surgery Partners President Resigns Effective October 2025
Neutral
Sep 16, 2025
On September 11, 2025, Harrison R. Bane, the National Group President of Surgery Partners, announced his resignation effective October 3, 2025. His departure was not due to any disagreements with the company’s operations or policies, suggesting a smooth transition without immediate impact on the company’s strategic direction.
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.