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MD

Pediatrix Medical Group NYSE:MD Stock Report

Last Price

US$16.92

Market Cap

US$1.4b

7D

-0.2%

1Y

-38.3%

Updated

06 Oct, 2022

Data

Company Financials +
MD fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance3/6
Financial Health2/6
Dividends0/6

MD Stock Overview

Pediatrix Medical Group, Inc., together with its subsidiaries, provides newborn, maternal-fetal, pediatric cardiology, and other pediatric subspecialty care services in the United States and Puerto Rico.

Pediatrix Medical Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Pediatrix Medical Group
Historical stock prices
Current Share PriceUS$16.92
52 Week HighUS$29.07
52 Week LowUS$16.31
Beta1.8
1 Month Change1.56%
3 Month Change-27.19%
1 Year Change-38.34%
3 Year Change-20.19%
5 Year Change-60.42%
Change since IPO216.63%

Recent News & Updates

Sep 29

Pediatrix: These 5 Graphs Suggest It's A Buy

Summary Pediatrix continues to incur a heavy downside on the chart with the stock down 37% this year to date. Despite the selloff, MD's bottom-line fundamentals continue to look increasingly attractive in the forward-looking investment landscape. In particular recent growth in earnings and return on capital exemplifies a quality that gives investors exposure to the quality factor. Net-net, I retain the buy rating for MD on a $33 valuation. Investment summary From the Portfolio Manager's desk Data-driven research is becoming increasingly important to identify opportunities within the equity spectrum. With the high-beta trade now exhausted, managers can no longer rely on equity positioning to compound capital. Tactical allocations have become essential in order to extract alpha for equity portfolios and avoid drawdown. This means analysing company fundamentals on a basis of quality, in terms of earnings, free cash flow and return on capital. With that, the market's punishment of Pediatrix Medical Group, Inc (MD) across the past 12 months appears largely unjustified and therefore presents us with an alpha opportunity. The stock looks mispriced and from our previous analysis here I noted there's a series of upside catalysts that look set to materialise in the coming 12-24 months for the company. Here I've noted the additional strengths that illustrate my bullish position in the risk/reward equation. Net-net I've decided to increase the equity risk to MD in out equity bucket and value the stock at $33 apiece. The following series of charts helps illustrate these fundamental tailwinds. Pediatrix earnings quality As seen in Exhibit 1, the company has continuously grown the top-bottom line on a sequential basis off a low point in FY19, subsequently reversing a heavy contraction period [seen in my previous analysis, see: Exhibit 2]. Operating income has lifted to $55 million ("mm") in Q2 FY22, up from $40.5mm the previous period, whereas free cash flow ("FCF") extended up by 560bps since the December 2021 quarter to $75mm. These growth patterns have been reflected in MD's bottom-line fundamentals, as seen below. Quarterly earnings have lifted to $0.36 per share and $0.99 on a TTM basis, having lifted up from negative $0.63 in TTM EPS from Q2 FY21. Meanwhile the company has maintained a steady but cyclical FCF conversion, pulling in an average 12-14% FCF margin in 3 out of the last 4 quarters. Net-net, MD has averaged a c.500bps FCF conversion as a percentage of turnover since Q3 FY20, and so Q2 FY22's 15.43% FCF margin was above average for the company as well. However, of particular standout is the 3.75% geometric growth in EPS per quarter off the low point in Q4 FY19 - this is commendable in my estimate, and adds a heavy tilt to the risk/reward calculus as I believe it is this kind of earnings quality that will stand out in the coming 12-36 months in equities. Exhibit 1. The sequential recovery in earnings [that are of good quality i.e. backed by CFFO, free cash flow] exhibits strength in MD's bottom-line fundamentals. I believe these are qualities that will generate alpha in equities into the coming 2-3 years. Earnings [and therefore valuation] backed by cash flow and FCF conversion at 15% of turnover in Q2 FY22. Note: All figures in $mm except in per share. All calculations made from GAAP earnings with no reconciliations. (Data: HB Insights, MD SEC Filings) In fact, FCF conversion is a standout in the investment debate by my estimation. As seen in Exhibit 2, MD's FCF remains steady in a cyclical fashion, and aligns with movements in the company's capital expenditure[s] ("CapEx") cycle. The company has averaged $4.03mm in quarterly CapEx spend since Q2 FY20 [note, CapEx in this instance is calculated net of asset dispositions], and allocated a cumulative net $57.13mm in net quarterly CapEx since Q4 FY18 inclusive. Meanwhile, the company has realized $90.7mm in cumulative quarterly FCF and $187mm in CFFO across the same time. Both numbers exhibit a healthy uptick in realized FCF yields across the same time. Exhibit 2. CapEx cycle well reflected in CFFO and FCF trends with cumulative quarterly FCF surpassing $90mm since FY18 Note: All figures in $mm or [%]. Free cash flow calculated as [ NOPAT - Investments ]. Capital Expenditures [CapEx] calculated net of asset dispositions, and therefore may reflect negative value on net terms. Average CapEx calculated as average of last 2 quarters. FCF yield calculated as a function of enterprise value. (Data: HB Insights, MD SEC filings) Return on capital equally as supportive Whilst the above trends in FCF and cash from operations exhibit strength on a long-term trend basis, results have been lumpy from period to period. I'm satisfied with this if the expenditures [CapEx through to FCF] are realized back to the company as a return on investment. Here I benchmark return on invested capital ("ROIC"), return on assets ("ROA") and asset turnover as a time series to examine MD's propensity to generate cash. Specifically I wanted to see how much NOPAT the company generated from the previous period's invested capital, extending from there. As seen in Exhibit 3, across the growth period outlined above [FY19-date] MD's return on investments have curled up substantially and now rests at ~12% on a TTM basis. Growth trends here suggest MD is winding up its return on ongoing investments, however, similar growth patterns are observed in the return on its existing investments/assets. ROA and asset turnover have both stretched up during this time and are back above pre-pandemic highs. However, I'd also note that of the company's c.$2.37 Billion in total assets and $845mm in book value of equity, MD records $1.53 Billion in goodwill from acquisitions [a non-cash, non-amortizable 'asset'], representing 64.6%/181.3% of assets/shareholder equity respectively. Exhibit 3. Return on ongoing and existing investments continuing to stretch up on a sequential basis [quarterly and TTM basis]. Note: All figures in $mm or [%]. All calculations made using GAAP earnings with no reconciliations. (Data: HB Insights, MD SEC Filings)

Sep 13
Here's Why Pediatrix Medical Group (NYSE:MD) Can Manage Its Debt Responsibly

Here's Why Pediatrix Medical Group (NYSE:MD) Can Manage Its Debt Responsibly

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that...

Aug 29
Here's What To Make Of Pediatrix Medical Group's (NYSE:MD) Decelerating Rates Of Return

Here's What To Make Of Pediatrix Medical Group's (NYSE:MD) Decelerating Rates Of Return

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. In a perfect...

Jul 27
Why Pediatrix Medical Group, Inc. (NYSE:MD) Could Be Worth Watching

Why Pediatrix Medical Group, Inc. (NYSE:MD) Could Be Worth Watching

While Pediatrix Medical Group, Inc. ( NYSE:MD ) might not be the most widely known stock at the moment, it led the NYSE...

Shareholder Returns

MDUS HealthcareUS Market
7D-0.2%2.5%3.3%
1Y-38.3%10.1%-20.4%

Return vs Industry: MD underperformed the US Healthcare industry which returned 13.9% over the past year.

Return vs Market: MD underperformed the US Market which returned -18.8% over the past year.

Price Volatility

Is MD's price volatile compared to industry and market?
MD volatility
MD Average Weekly Movement6.2%
Healthcare Industry Average Movement7.7%
Market Average Movement6.9%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.9%

Stable Share Price: MD is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: MD's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19795,000Mark Ordanhttps://www.mednax.com

Pediatrix Medical Group, Inc., together with its subsidiaries, provides newborn, maternal-fetal, pediatric cardiology, and other pediatric subspecialty care services in the United States and Puerto Rico. It offers neonatal care services, such as clinical care to babies born prematurely or with complications within specific units at hospitals through neonatal physician subspecialists, neonatal nurse practitioners, and other pediatric clinicians. The company also provides maternal-fetal care services, including inpatient and office-based clinical care to expectant mothers and unborn babies through affiliated maternal-fetal medicine subspecialists, as well as obstetricians and other clinicians, including maternal-fetal nurse practitioners, certified nurse mid-wives, ultrasonographers, and genetic counselors.

Pediatrix Medical Group Fundamentals Summary

How do Pediatrix Medical Group's earnings and revenue compare to its market cap?
MD fundamental statistics
Market CapUS$1.41b
Earnings (TTM)US$81.89m
Revenue (TTM)US$1.96b

17.2x

P/E Ratio

0.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MD income statement (TTM)
RevenueUS$1.96b
Cost of RevenueUS$1.45b
Gross ProfitUS$511.99m
Other ExpensesUS$430.10m
EarningsUS$81.89m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.98
Gross Margin26.13%
Net Profit Margin4.18%
Debt/Equity Ratio93.8%

How did MD perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is MD undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MD?

Other financial metrics that can be useful for relative valuation.

MD key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.1x
Enterprise Value/EBITDA8.2x
PEG Ratio1.9x

Price to Earnings Ratio vs Peers

How does MD's PE Ratio compare to its peers?

MD PE Ratio vs Peers
The above table shows the PE ratio for MD vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average33.1x
DCGO DocGo
21.8x24.8%US$1.1b
RDNT RadNet
48.5x3.5%US$1.1b
ADUS Addus HomeCare
35.2x17.8%US$1.6b
NRC National Research
27.1xn/aUS$979.0m
MD Pediatrix Medical Group
17.2x8.8%US$1.4b

Price-To-Earnings vs Peers: MD is good value based on its Price-To-Earnings Ratio (17.2x) compared to the peer average (33.1x).


Price to Earnings Ratio vs Industry

How does MD's PE Ratio compare vs other companies in the US Healthcare Industry?

Price-To-Earnings vs Industry: MD is good value based on its Price-To-Earnings Ratio (17.2x) compared to the US Healthcare industry average (19.2x)


Price to Earnings Ratio vs Fair Ratio

What is MD's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MD PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio17.2x
Fair PE Ratio23x

Price-To-Earnings vs Fair Ratio: MD is good value based on its Price-To-Earnings Ratio (17.2x) compared to the estimated Fair Price-To-Earnings Ratio (23x).


Share Price vs Fair Value

What is the Fair Price of MD when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MD ($16.92) is trading below our estimate of fair value ($68.56)

Significantly Below Fair Value: MD is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is Pediatrix Medical Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


8.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MD's forecast earnings growth (8.8% per year) is above the savings rate (1.9%).

Earnings vs Market: MD's earnings (8.8% per year) are forecast to grow slower than the US market (14.8% per year).

High Growth Earnings: MD's earnings are forecast to grow, but not significantly.

Revenue vs Market: MD's revenue (5.5% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MD's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MD's Return on Equity is forecast to be high in 3 years time


Discover growth companies

Past Performance

How has Pediatrix Medical Group performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-45.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MD has a large one-off loss of $71.1M impacting its June 30 2022 financial results.

Growing Profit Margin: MD's current net profit margins (4.2%) are higher than last year (2.1%).


Past Earnings Growth Analysis

Earnings Trend: MD's earnings have declined by 45.3% per year over the past 5 years.

Accelerating Growth: MD's earnings growth over the past year (117.1%) exceeds its 5-year average (-45.3% per year).

Earnings vs Industry: MD earnings growth over the past year (117.1%) exceeded the Healthcare industry 1.9%.


Return on Equity

High ROE: MD's Return on Equity (9.7%) is considered low.


Discover strong past performing companies

Financial Health

How is Pediatrix Medical Group's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: MD's short term assets ($459.3M) exceed its short term liabilities ($329.4M).

Long Term Liabilities: MD's short term assets ($459.3M) do not cover its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: MD's net debt to equity ratio (81.1%) is considered high.

Reducing Debt: MD's debt to equity ratio has increased from 62.4% to 93.8% over the past 5 years.

Debt Coverage: MD's debt is not well covered by operating cash flow (11.4%).

Interest Coverage: MD's interest payments on its debt are well covered by EBIT (4.7x coverage).


Balance Sheet


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Dividend

What is Pediatrix Medical Group current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Pediatrix Medical Group Dividend Yield vs Market
How does Pediatrix Medical Group dividend yield compare to the market?
SegmentDividend Yield
Company (Pediatrix Medical Group)n/a
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.6%
Industry Average (Healthcare)1.4%
Analyst forecast in 3 Years (Pediatrix Medical Group)0%

Notable Dividend: Unable to evaluate MD's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate MD's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if MD's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MD's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as MD has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Mark Ordan (63 yo)

2.25yrs

Tenure

US$6,848,969

Compensation

Mr. Mark S. Ordan serves as Chief Executive Officer and Director at Pediatrix Medical Group, Inc. (formerly known as MEDNAX, Inc.) since July 12, 2020. Mr. Ordan serves as a Director of The Carlyle Group I...


CEO Compensation Analysis

Mark Ordan's Compensation vs Pediatrix Medical Group Earnings
How has Mark Ordan's remuneration changed compared to Pediatrix Medical Group's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$82m

Mar 31 2022n/an/a

US$82m

Dec 31 2021US$7mUS$1m

US$108m

Sep 30 2021n/an/a

US$72m

Jun 30 2021n/an/a

US$38m

Mar 31 2021n/an/a

US$14m

Dec 31 2020US$6mUS$471k

-US$10m

Compensation vs Market: Mark's total compensation ($USD6.85M) is about average for companies of similar size in the US market ($USD5.49M).

Compensation vs Earnings: Mark's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: MD's management team is considered experienced (2.1 years average tenure).


Board Members

Experienced Board: MD's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NYSE:MD Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
29 Oct 21SellUS$248,225John PepiaIndividual9,238US$26.87

Ownership Breakdown

What is the ownership structure of MD?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders2,258,3202.5%
Hedge Funds5,915,0006.6%
Institutions81,151,65090.8%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 92.4% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
16.79%
BlackRock, Inc.
13,972,058$236.4m6.49%0.01%
12.38%
The Vanguard Group, Inc.
10,299,758$174.3m7.94%no data
8.71%
AllianceBernstein L.P.
7,248,231$122.6m-0.97%0.05%
8.2%
EARNEST Partners, LLC
6,825,902$115.5m5.69%0.76%
7.11%
Starboard Value LP
5,915,000$100.1m0%1.94%
5.22%
Lazard Asset Management LLC
4,341,665$73.5m33.03%0.07%
4.33%
Dimensional Fund Advisors LP
3,600,738$60.9m0.15%0.02%
3.97%
State Street Global Advisors, Inc.
3,301,238$55.9m4.89%no data
3.71%
FMR LLC
3,083,913$52.2m-12.08%no data
3.6%
River Road Asset Management, LLC
2,991,963$50.6m14.76%0.72%
3.31%
ArrowMark Colorado Holdings, LLC
2,750,953$46.5m2.98%0.55%
1.88%
New York State Common Retirement Fund
1,565,307$26.5m9.86%0.03%
1.78%
Geode Capital Management, LLC
1,481,015$25.1m7.75%no data
1.48%
Charles Schwab Investment Management, Inc.
1,230,606$20.8m10.17%0.01%
1.41%
Northern Trust Global Investments
1,176,734$19.9m7.28%no data
1.1%
D. E. Shaw & Co., L.P.
917,295$15.5m6.17%0.03%
1.06%
BNY Mellon Asset Management
878,178$14.9m-6.34%no data
1.01%
Aristotle Capital Boston, LLC
840,539$14.2m6.42%0.43%
0.97%
Segall Bryant & Hamill, LLC
804,847$13.6m12.68%0.15%
0.9%
Roger Medel
747,930$12.7m1.15%no data
0.79%
Norges Bank Investment Management
653,847$11.1m0%no data
0.74%
Palisade Capital Management LLC
619,534$10.5m1.11%0.36%
0.69%
Principal Global Investors, LLC
575,276$9.7m-8.43%0.01%
0.64%
Eaton Vance Management
531,809$9.0m20.56%no data
0.64%
Granite Investment Partners, LLC
530,923$9.0m-6.72%0.28%

Company Information

Pediatrix Medical Group, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Pediatrix Medical Group, Inc.
  • Ticker: MD
  • Exchange: NYSE
  • Founded: 1979
  • Industry: Health Care Services
  • Sector: Healthcare
  • Implied Market Cap: US$1.408b
  • Shares outstanding: 83.21m
  • Website: https://www.mednax.com

Number of Employees


Location

  • Pediatrix Medical Group, Inc.
  • 1301 Concord Terrace
  • Sunrise
  • Florida
  • 33323
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MDNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 1995
PDCDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1995
MD *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 1995

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/06 00:00
End of Day Share Price2022/10/06 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.