Surgery Partners, Inc. (NASDAQ:SGRY): Are Analysts Optimistic?

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., together with its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The company’s loss has recently broadened since it announced a US$12m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$61m, moving it further away from breakeven. Many investors are wondering about the rate at which Surgery Partners will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Surgery Partners

According to the 12 industry analysts covering Surgery Partners, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$102m in 2025. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 84% year-on-year, on average, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Surgery Partners given that this is a high-level summary, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Surgery Partners is its 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 70%. 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 put together a list of essential aspects you should further examine:

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.