Analysts Are Optimistic We'll See A Profit From Surgery Partners, Inc. (NASDAQ:SGRY)
Surgery Partners, Inc. (NASDAQ:SGRY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Surgery Partners, Inc., through its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The US$4.0b market-cap company posted a loss in its most recent financial year of US$156m and a latest trailing-twelve-month loss of US$86m shrinking the gap between loss and breakeven. As path to profitability is the topic on Surgery Partners' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
See our latest analysis for Surgery Partners
According to the 9 industry analysts covering Surgery Partners, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of US$23m in 2022. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 52%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Surgery Partners' growth isn’t the focus of this broad overview, but, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Surgery Partners currently has a debt-to-equity ratio of 142%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Surgery Partners, so if you are interested in understanding the company at a deeper level, take a look at Surgery Partners' company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:
Valuation: What is Surgery Partners worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Surgery Partners is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Surgery Partners’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
