Surgery Partners (SGRY): Revisiting Valuation After Guidance Cut, Delayed Investments and Legal Investigation News

Surgery Partners (SGRY) is back in focus after cutting its full year revenue and adjusted EBITDA outlook, a move tied to delayed capital deployment, divestiture related earnings losses, and a sharp 25% stock drop.

See our latest analysis for Surgery Partners.

The guidance cut and legal overhang help explain why the 30 day share price return sits at around negative 21 percent and the one year total shareholder return is down roughly 21 percent, signaling momentum that is clearly fading rather than building.

If this kind of volatility has you rethinking your healthcare exposure, it could be worth scanning other healthcare stocks that pair more stable growth with cleaner narratives.

With shares now trading at a steep discount to analyst targets, despite solid topline growth but ongoing losses and legal scrutiny, investors face a pivotal question: is SGRY a contrarian value play, or is the market correctly discounting future growth?

Most Popular Narrative Narrative: 32.4% Undervalued

Compared with the last close at 17.38 dollars, the most followed narrative points to a meaningfully higher fair value, built on ambitious growth and margin recovery expectations.

Analysts assume that profit margins will increase from -5.6 percent today to 3.8 percent in 3 years time.

In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 30.6x on those 2028 earnings, up from -15.9x today.

Read the complete narrative.

Want to see what turns persistent losses into future profits, and why a premium earnings multiple might suddenly make sense for an outpatient surgery operator? The full narrative unpacks the revenue ramp, the margin rebuild, and the valuation leap that all have to line up for this upside case to hold.

Result: Fair Value of $25.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising interest costs and slower than planned acquisitions could easily derail the growth, margin rebuild, and deleveraging story that analysts are banking on.

Find out about the key risks to this Surgery Partners narrative.

Build Your Own Surgery Partners Narrative

If you see the story differently or want to stress test the assumptions yourself, you can build a complete view in just minutes, Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Surgery Partners.

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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.

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