Surgery Partners (SGRY): Valuation Insights After Strong Earnings Beat and Upgraded Full-Year Outlook

Surgery Partners (SGRY) delivered a standout quarter, with both revenue and earnings coming in above what most had expected. The company also lifted its full-year outlook ahead of others in its sector.

See our latest analysis for Surgery Partners.

Surgery Partners’ upbeat results fueled a wave of optimism, sending the share price up over 10% in the last week alone. While this momentum stands out, the bigger picture is more sobering. The stock’s total shareholder return remains down more than 22% over the past year, suggesting investors are watching for proof that this latest strength can turn the tide for the longer term.

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With shares trading well below analyst targets and investor sentiment improving, the question remains whether Surgery Partners is undervalued or if the market has already priced in all future growth potential. Is there a real buying opportunity here?

Most Popular Narrative: 26.5% Undervalued

The most widely followed narrative places Surgery Partners’ fair value 26.5% above its last close of $22.80. This suggests analysts see significant upside if company ambitions align with projections.

Disciplined execution on M&A and portfolio optimization, including accretive acquisitions and potential asset sales or health system partnerships, should enhance margin expansion, accelerate deleveraging, and improve free cash flow conversion. These factors may support improvements in net margins and long-term earnings power.

Read the complete narrative.

Want to discover why future margins have captured so much attention? The interest here relies on bold assumptions about cash flow and surgical volume. Think you can spot the key levers behind this optimistic outlook? Explore the full narrative for the surprising forecasts driving this fair value call.

Result: Fair Value of $31.00 (UNDERVALUED)

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

Still, rising interest expenses and delays in acquisition activity could undermine the bullish scenario that analysts are forecasting for Surgery Partners.

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

Build Your Own Surgery Partners Narrative

If you see things differently or want to dig deeper into the story, you can easily build your own custom take in just a few minutes. Do it your way.

A great starting point for your Surgery Partners research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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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