Analysts Are Optimistic We'll See A Profit From Surgery Partners, Inc. (NASDAQ:SGRY)

With the business potentially at an important milestone, we thought we'd take a closer look at Surgery Partners, Inc.'s (NASDAQ:SGRY) future prospects. Surgery Partners, Inc., together with its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The US$4.1b market-cap company posted a loss in its most recent financial year of US$12m and a latest trailing-twelve-month loss of US$34m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Surgery Partners' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Surgery Partners

According to the 12 industry analysts covering Surgery Partners, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of US$63m in 2024. So, the company is predicted to breakeven approximately 12 months 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 61%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Surgery Partners' upcoming projects, but, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Surgery Partners currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Surgery Partners' case is 67%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Surgery Partners which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Surgery Partners, take a look at Surgery Partners' company page on Simply Wall St. We've also compiled a list of key factors you should further research:

1. 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.
2. 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.
3. 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.