Analysts Expect Surgery Partners, Inc. (NASDAQ:SGRY) To Breakeven Soon

With the business potentially at an important milestone, we thought we'd take a closer look at Surgery Partners, Inc.'s (NASDAQ:SGRY) future prospects. Surgery Partners, Inc., through its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The US$2.5b market-cap company posted a loss in its most recent financial year of US$81m and a latest trailing-twelve-month loss of US$38m shrinking the gap between loss and breakeven. The most pressing concern for investors is Surgery Partners' path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Surgery Partners

According to the 9 industry analysts covering Surgery Partners, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$19m in 2022. Therefore, the company is expected to breakeven roughly 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 44% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Surgery Partners' upcoming projects, however, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Surgery Partners is its debt-to-equity ratio of 112%. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Surgery Partners to cover in one brief article, but the key fundamentals for the company can all be found in one place – Surgery Partners' company page on Simply Wall St. We've also compiled a list of key aspects you should further examine:

1. Valuation: What is Surgery Partners worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Surgery Partners is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Surgery Partners’s board and the CEO’s background.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.