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Investing.com - Surgery Partners (NASDAQ:SGRY), a $2.8 billion market cap healthcare operator with trailing twelve-month revenue of $3.2 billion, received a reiterated Buy rating and $35.00 price target from Benchmark on Wednesday. According to InvestingPro data, the stock is currently trading near its Fair Value, with analysts setting targets between $24 and $36.
The research firm noted that Surgery Partners reported in-line first-quarter 2025 results and maintained its fiscal year 2025 guidance, though the company now expects results to fall in the lower half of the projected ranges. Despite showing strong revenue growth of 12% over the last twelve months, capital deployment has reached only $66 million year-to-date, with just $12 million committed since March 31, trailing the annual target of at least $200 million that was incorporated into the company’s guidance.
Benchmark highlighted Surgery Partners’ favorable positioning amid various macro challenges, including minimal exposure to tariff-related price increases, limited Medicare and Medicaid revenue (under 5%), and potential benefits from Medicare site-neutral payment proposals. The July 14 CMS release of the 2026 ASC proposed rule included a 2.4% rate update and plans to phase out the Inpatient Only procedure list, which Benchmark views as a significant tailwind for the sector.
The research firm emphasized that reducing leverage remains key to unlocking valuation, noting that Surgery Partners has already reduced its consolidated ASC network by nearly 10% through transactions and partnerships. Current leverage stands at 4.1x, with a long-term target of approximately 3x.
Management indicated they are now considering surgical hospitals as part of their portfolio optimization strategy, potentially through joint ventures with health systems, which could accelerate progress toward the company’s leverage reduction goals. InvestingPro analysis reveals additional insights about Surgery Partners’ financial health and future prospects, with over 30 exclusive ProTips available for subscribers, including detailed profitability forecasts and growth metrics.
In other recent news, Surgery Partners Inc reported its Q2 2025 earnings, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.17, slightly above the forecasted $0.16. Additionally, Surgery Partners reported revenue of $826 million, exceeding the anticipated $819.45 million. These financial results highlight a positive performance for the company. The earnings announcement was followed by a pre-market stock increase, indicating favorable investor sentiment. This development comes amid a period of scrutiny from analysts regarding the company’s financial health. While the stock movement was noted, the primary focus remains on the company’s ability to exceed revenue and earnings projections.
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