Surgery Partners (NASDAQ:SGRY) shareholders are still up 368% over 3 years despite pulling back 4.6% in the past week
We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. Not every pick can be a winner, but when you pick the right stock, you can win big. One bright shining star stock has been Surgery Partners, Inc. (NASDAQ:SGRY), which is 368% higher than three years ago. On top of that, the share price is up 18% in about a quarter.
While this past week has detracted from the company's three-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
See our latest analysis for Surgery Partners
Given that Surgery Partners didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over the last three years Surgery Partners has grown its revenue at 7.3% annually. That's not a very high growth rate considering it doesn't make profits. So we're surprised that the share price has soared by 67% each year over that time. A win is a win, even if the revenue growth doesn't really explain it, in our view). Shareholders would want to be sure that the share price rise is sustainable.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at Surgery Partners' financial health with this free report on its balance sheet.
A Different Perspective
It's nice to see that Surgery Partners shareholders have received a total shareholder return of 16% over the last year. However, that falls short of the 24% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Surgery Partners has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.
We will like Surgery Partners better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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.
