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
|Historical stock prices|
|Current Share Price||US$16.92|
|52 Week High||US$29.07|
|52 Week Low||US$16.31|
|1 Month Change||1.56%|
|3 Month Change||-27.19%|
|1 Year Change||-38.34%|
|3 Year Change||-20.19%|
|5 Year Change||-60.42%|
|Change since IPO||216.63%|
Recent News & Updates
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)
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|MD||US Healthcare||US Market|
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.
|MD Average Weekly Movement||6.2%|
|Healthcare Industry Average Movement||7.7%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.6%|
|10% least volatile stocks in US Market||2.9%|
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
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
|MD fundamental statistics|
Is MD overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|MD income statement (TTM)|
|Cost of Revenue||US$1.45b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||0.98|
|Net Profit Margin||4.18%|
How did MD perform over the long term?See historical performance and comparison
Is MD undervalued compared to its fair value, analyst forecasts and its price relative to the market?
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
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.
|What is MD's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does MD's PE Ratio compare to its peers?
|MD PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
ADUS Addus HomeCare
NRC National Research
MD Pediatrix Medical Group
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.
|Current PE Ratio||17.2x|
|Fair PE Ratio||23x|
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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How is Pediatrix Medical Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
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
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How has Pediatrix Medical Group performed over the past 5 years?
Past Performance Score3/6
Past Performance Score 3/6
Growing Profit Margin
Earnings vs Industry
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.
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How is Pediatrix Medical Group's financial position?
Financial Health Score2/6
Financial Health Score 2/6
Short Term Liabilities
Long Term Liabilities
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).
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What is Pediatrix Medical Group current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
|Pediatrix Medical Group Dividend Yield vs Market|
|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.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Mark Ordan (63 yo)
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|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$7m||US$1m|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$6m||US$471k|
Compensation vs Market: Mark's total compensation ($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.
Experienced Management: MD's management team is considered experienced (2.1 years average tenure).
Experienced Board: MD's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.
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
|29 Oct 21||SellUS$248,225||John Pepia||Individual||9,238||US$26.87|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Pediatrix Medical Group, Inc.'s employee growth, exchange listings and data sources
- 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
- Pediatrix Medical Group, Inc.
- 1301 Concord Terrace
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|MD||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Sep 1995|
|PDC||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Sep 1995|
|MD *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Sep 1995|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/06 00:00|
|End of Day Share Price||2022/10/06 00:00|
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.