Loss-Making Surgery Partners, Inc. (NASDAQ:SGRY) Set To Breakeven

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$5.3b market-cap company announced a latest loss of US$81m on 31 December 2021 for its most recent financial year result. As path to profitability is the topic on Surgery Partners' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out 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$15m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 57% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Surgery Partners given that this is a high-level summary, 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 114%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around 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 put together a list of relevant 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.