Surgery Partners Inc (SGRY, Financial), a key player in the healthcare providers and services industry, has recently seen a significant uptick in its stock performance. Over the past week, the company's stock price has surged by an impressive 25.69%, and over the last three months, it has gained 20.76%. Currently, the market capitalization stands at $3.89 billion with a stock price of $30.64. According to GuruFocus, the GF Value of the stock is $30.06, suggesting that it is fairly valued, a status consistent with its valuation three months ago at $28.71.
Overview of Surgery Partners Inc
Surgery Partners Inc specializes in an integrated outpatient delivery model, focusing on surgical and related ancillary care. This model supports both patients and physicians by providing cost-effective solutions without compromising on quality. The company operates primarily through two segments: Surgical Facility Services and Ancillary Services, with the former being the major revenue contributor. This strategic focus has positioned Surgery Partners as a notable entity in its sector.
Assessing Profitability
The company's Profitability Rank is currently at 5/10. Surgery Partners boasts an Operating Margin of 15.42%, which is better than 82.07% of its peers in the industry. However, its Return on Equity (ROE) and Return on Assets (ROA) stand at 0.03% and 0.01% respectively, indicating room for improvement in capital efficiency. The Return on Invested Capital (ROIC) is more robust at 6.65%, surpassing 67.7% of competitors. Despite these figures, the company has only been profitable for two out of the past ten years, which is a concern for potential investors.
Growth Trajectory and Future Prospects
Surgery Partners is ranked 7/10 on the Growth Rank, reflecting a mixed performance in revenue growth. The company has experienced a decline in its 3-Year and 5-Year Revenue Growth Rates per Share at -17.00% and -10.30% respectively. However, looking ahead, the Total Revenue Growth Rate is estimated at 10.13% for the next 3 to 5 years, and the EPS without NRI Growth Rate is projected at an encouraging 27.88%. These projections suggest a potential turnaround in its financial growth trajectory.
Investor Confidence and Market Position
Notable investors in Surgery Partners include Vanguard Health Care Fund (Trades, Portfolio), holding 3,609,838 shares, and First Eagle Investment (Trades, Portfolio) and Chuck Royce (Trades, Portfolio), holding smaller stakes. This investor interest reflects a level of confidence in the company's market strategy and future outlook.
Competitive Landscape
When compared to its competitors like Select Medical Holdings Corp (SEM, Financial) with a market cap of $5.12 billion, AMN Healthcare Services Inc (AMN, Financial) at $2.14 billion, and Amedisys Inc (AMED, Financial) at $3.19 billion, Surgery Partners holds a competitive position in the market. Each of these companies shares a common goal of enhancing healthcare delivery but differ slightly in their operational focus and market capitalization.
Conclusion
In conclusion, Surgery Partners Inc's recent stock performance has been robust, supported by a fair valuation and a promising growth outlook. While there are areas in profitability that need strengthening, the strategic focus on outpatient surgical services and the confidence shown by notable investors suggest a positive trajectory. As the company continues to navigate the complexities of the healthcare market, it remains a significant player worth watching in the evolving sector.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
