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On Monday, Cantor Fitzgerald reaffirmed its Overweight rating on Surgery Partners (NASDAQ:SGRY) with a steady price target of $36.00. The stock, which has shown significant momentum with a 20% return over the past week, currently trades near $25.50. The endorsement comes amid observations of notable trends in the healthcare staffing sector. According to InvestingPro data, analyst consensus remains bullish with price targets ranging from $28 to $40. Analysts at Cantor Fitzgerald have identified a significant reduction in Ambulatory Surgery Center (ASC) nursing openings from December to January, the largest decline recorded within their tracking period.
The analysts suggest that the decrease in hiring could be a signal that Surgery Partners is preparing for a potential transaction with Bain Capital. This anticipation of a deal could be influencing the company’s current hiring strategy. The company, which generates nearly $3 billion in annual revenue with a 10% growth rate, has maintained a strong financial position, earning a "GREAT" overall score on InvestingPro’s Financial Health assessment. Additionally, there has been a marked slowdown in physician hiring data from December, which then stabilized in January.
Despite these hiring trends, there is an element of uncertainty as the average signing bonus for positions increased sharply to $7,800 in January, up from $5,800 in November and December. This increase in bonuses may have been a strategic move by Surgery Partners to attract and quickly fill open positions, countering the hiring slowdown.
Surgery Partners, a leading healthcare services company, operates surgical facilities across the United States. Its stock performance is closely watched by investors, especially in light of potential strategic developments such as the speculated deal with Bain Capital.
The company’s efforts to adjust hiring incentives and manage its workforce effectively are critical factors for its operational efficiency and financial performance. As such, the insights provided by Cantor Fitzgerald analysts offer a glimpse into the company’s strategic maneuvers in the face of industry challenges and opportunities.
In other recent news, Surgery Partners has been proposed a buyout by Bain Capital Private Equity at $25.75 per share. The offer, contingent on approval from a Special Committee of independent directors and majority shareholders unaffiliated with Bain Capital, is being evaluated. Meanwhile, Surgery Partners has expanded its Board of Directors with the addition of Dr. Laura L. Forese, a healthcare veteran, which is expected to bring valuable experience to the board.
Regarding financial performance, the company reported a 14% year-over-year increase in net revenue to $770 million and a 22% rise in adjusted EBITDA to $128.6 million in a recent quarter. BofA Securities upgraded the company’s shares to a Buy rating, citing strong industry tailwinds. However, RBC Capital, Jefferies, and TD Cowen revised their price targets for the company while maintaining positive ratings.
These developments come amidst Surgery Partners’ ongoing growth strategy and operational resilience. The company anticipates full-year net revenue and adjusted EBITDA to exceed $3.075 billion and $508 million, respectively. However, investors are reminded that the acquisition proposal from Bain Capital is still in its early stages and is not guaranteed to result in a formal bid or transaction.
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