Surgery Partners (SGRY) AI Stock Analysis

• Market Cap: $2.89B
• Dividend Yield: N/A
• Average Volume (3M): 1.56M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.29
• Revenue Growth: 12.05%
• EPS Growth: -432.59%
• Country: US
• Employees: 15,000
• Sector: Healthcare
• Sector Strength: 52
• Industry: Medical - Care Facilities
• EPS (TTM): 0.17
• Shares Outstanding: 128,209,410
• 10 Day Avg. Volume: 1,135,204
• 30 Day Avg. Volume: 1,563,157
• PEG Ratio: -0.01
• Price to Book (P/B): 1.49
• Price to Sales (P/S): 0.86
• P/FCF Ratio: 12.73
• Enterprise Value/Market Cap: 2.87
• Enterprise Value/Revenue: 2.56
• Enterprise Value/Gross Profit: 10.78
• Enterprise Value/Ebitda: 15.86
• 1Y Price Target: $30.50
• Price Target Upside: 38.13% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 60 Neutral
• Price Target: $23.00 ▲(4.17% Upside)

Surgery Partners' overall stock score is driven by strong earnings call performance and positive corporate events, which are offset by financial challenges and a weak valuation. The technical analysis indicates a bearish trend, further impacting the score.

Positive Factors

Financial Performance

Surgery Partners Inc. reported total revenues of $826M, up 8.4%, and Adj EBITDA of $129M, up 9% year over year, with a 10 basis points margin improvement.

Sector Trends

Ambulatory Surgery Centers are benefiting from payors pushing utilization to outpatient and lower cost settings, with a potential acceleration of this shift.

Strategic Initiatives

SGRY continues to advance efforts to strategically shift mix towards higher acuity, MSK/ortho-focused procedures with total joints up 26%.

Negative Factors

Capital Deployment

The company's capital deployment to date is trailing the annual target of at least $200M, which was included in the FY25 guidance ranges.

Debt and Leverage

The leverage ratio increased to 4.1x from 3.7x at the end of last year, indicating a need for the company to focus on cash flow initiatives.

Interest Expenses

Cash interest expense was +$23m yty in 2Q and is the primary hill to climb for operating cash flow growth in 2025.

Surgery Partners Business Overview & Revenue Model

Company Description

Surgery Partners, Inc. is a leading healthcare services company that specializes in the development and operation of surgical facilities, including ambulatory surgery centers (ASCs) and surgical hospitals. The company focuses on various surgical specialties, such as orthopedics, neurosurgery, gastroenterology, and pain management, providing high-quality, cost-effective surgical care. Surgery Partners partners with physicians and healthcare providers to deliver efficient surgical services and improve patient outcomes.

How the Company Makes Money

Surgery Partners generates revenue primarily through the operation of its surgical facilities, which includes performing surgeries and related services. Key revenue streams include facility fees charged for the use of the surgery centers, professional fees from physicians performing surgeries, and ancillary services such as anesthesia and laboratory services. The company also benefits from partnerships with healthcare providers and payers, which help secure patient referrals and ensure a steady flow of surgical cases. Additionally, Surgery Partners may receive reimbursements from government programs and private insurance companies, further contributing to its overall earnings.

Surgery Partners Financial Statement Overview

Summary

Surgery Partners is experiencing robust revenue growth, but profitability remains a challenge due to ongoing net losses and high leverage. The balance sheet reflects significant debt, which could pose risks if not managed carefully. Cash flow generation is strong, providing some stability amidst financial challenges. The company needs to focus on improving profitability and reducing leverage to enhance its financial health.

Income Statement

Surgery Partners has shown consistent revenue growth, with a TTM (Trailing-Twelve-Months) revenue of $3.17 billion, up from $2.54 billion in 2022. However, the company has been struggling with profitability, as evidenced by negative net income margins over the years. The gross profit margin is healthy at approximately 22.6% for TTM, but the net profit margin remains negative due to high operating expenses and interest costs.

Balance Sheet

The company's balance sheet shows a high debt-to-equity ratio of 2.22, indicating significant leverage. While the equity ratio is fairly stable at 21.9%, the high level of debt poses a potential risk. Return on equity is negative due to the company's net losses, which impacts the overall financial stability.

Cash Flow

Surgery Partners has demonstrated strong operating cash flow, with a TTM figure of $265.4 million. The free cash flow to net income ratio is positive, indicating effective cash management despite net losses. However, free cash flow growth has been inconsistent, reflecting fluctuating capital expenditures and financing activities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.24B	3.11B	2.74B	2.54B	2.23B	1.86B
Gross Profit	768.60M	745.60M	647.50M	574.90M	491.40M	379.80M
EBITDA	522.30M	501.40M	446.10M	460.00M	401.00M	277.80M
Net Income	-180.40M	-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	250.10M	269.50M	195.90M	282.90M	389.90M	317.90M
Total Debt	3.88B	3.70B	3.06B	2.93B	3.29B	3.20B
Total Liabilities	4.38B	4.25B	3.51B	6.68B	3.82B	3.79B
Stockholders Equity	1.75B	1.79B	1.99B	2.00B	1.09B	550.10M
Cash Flow
Free Cash Flow	94.00M	209.70M	205.00M	78.20M	29.50M	204.00M
Operating Cash Flow	263.90M	300.10M	293.80M	158.80M	87.10M	246.90M
Investing Cash Flow	-235.60M	-488.50M	-225.60M	-307.90M	-331.70M	-88.40M
Financing Cash Flow	8.30M	262.00M	-155.20M	42.10M	316.30M	66.70M

Surgery Partners Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SGRY, the sentiment is Negative. The current price of 22.08 is below the 20-day moving average (MA) of 22.83, below the 50-day MA of 22.47, and below the 200-day MA of 22.66, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 44.35 is Neutral, neither overbought nor oversold. The STOCH value of 16.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SGRY.

Surgery Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ADUS	79 Outperform	$2.08B	24.97	8.54%	―	14.29%	7.85%
AMED	73 Outperform		―	7.26%	―	4.92%	-7.34%
ACHC	72 Outperform	$2.19B	15.63	4.62%	―	5.64%	―
ASTH	72 Outperform	$1.48B	57.54	3.50%	―	51.97%	-64.10%
SEM	71 Outperform	$1.62B	12.28	8.15%	1.92%	-16.10%	-48.97%
SGRY	60 Neutral	$2.89B	―	-9.75%	―	12.05%	-432.59%
Sector *	51 Neutral	$7.95B	-0.38	-43.43%	2.22%	22.30%	-1.83%

Surgery Partners Corporate Events

Surgery Partners Announces Credit Agreement Amendment

On August 13, 2025, Surgery Partners, Inc. announced a second amendment to its credit agreement, involving a significant refinancing effort. The amendment introduces a new tranche of term loans totaling $1,383 million, replacing existing loans and revolving credit commitments. This strategic financial restructuring aims to enhance the company’s financial flexibility and operational stability, with the new loans maturing in 2028 and 2030, respectively.

Surgery Partners Appoints New Chairman After Resignation

On August 4, 2025, Wayne S. DeVeydt resigned as a director and the Executive Chairman of the Board of Directors of Surgery Partners, Inc., with no disagreements cited regarding company operations, policies, or practices. Following his resignation, Blair E. Hendrix was appointed as Chairman, and the Board’s size was reduced from 11 to 10 directors.

Surgery Partners Decides to Remain Independent

On June 17, 2025, Surgery Partners, Inc. announced that its Special Committee of independent directors, after discussions with Bain Capital regarding a proposal to acquire all outstanding shares not owned by Bain, decided to continue as an independent publicly traded company. The decision reflects the Committee’s confidence in Surgery Partners’ long-term growth prospects and ability to enhance shareholder value through its established growth algorithm and business execution. The company reaffirmed its financial guidance for 2025 and plans to host an Investor Day in the second half of the year to discuss future growth plans and industry trends.