Jefferies Reiterates a Buy Rating on Surgery Partners Inc

By Carrie Williams

In a report released yesterday, Brian Tanquilut from Jefferies reiterated a Buy rating on Surgery Partners Inc (NASDAQ: SGRY), with a price target of $24. The company’s shares closed yesterday at $14.60.

Tanquilut said:

“We remain bullish on SGRY given our view that 1) the company is well- positioned to continue delivering very healthy organic growth (+10.3% in Q3 despite expected July softness), 2) tailwinds from new complex procedures (i.e., ortho) shifting to ASCs will provide an incremental LT growth driver, & 3) a strong M&A pipeline will continue to boost growth. Trading at 0.7x PE/G & 9.5x EBITDA, we believe SGRY is compelling at current levels. SGRY continues to deliver consistent, double-digit organic growth. Despite volume softness in July (partially calendar-related) which was previewed on the Q2 earnings call, SGRY put up strong SS rev growth of +10.3% in Q3, which highlights the company’s ability to continue driving consistent, double-digit same-store growth.”

According to, Tanquilut is ranked 0 out of 5 stars with an average return of -10.5% and a 34.0% success rate. Tanquilut covers the Healthcare sector, focusing on stocks such as Five Star Quality Care, Quest Diagnostics Inc., and U.S. Physical Therapy.

Surgery Partners Inc has an analyst consensus of Moderate Buy.

Based on Surgery Partners Inc’s latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $283 million and GAAP net loss of $2.34 million. In comparison, last year the company earned revenue of $240 million and had a GAAP net loss of $3.12 million.

Based on the recent corporate insider activity of 8 insiders, corporate insider sentiment is neutral on the stock.

Surgery Partners, Inc. is healthcare services company, which engages in the provision of solutions for surgical and related ancillary care in support of its patients and physicians. It operates through the following segments: Surgical Facility Services, Ancillary Services, and Optical Services. The Surgical Facility Services segment consists of the operation of ASCs and surgical hospitals, and includes its anesthesia services. Its surgical facilities provide non-emergency surgical procedures across many specialties, including, among others, ENT, GI, general surgery, ophthalmology, orthopedics and pain management. The Ancillary Services segment consists of a diagnostic laboratory, a specialty pharmacy and multi-specialty physician practices. The Optical Services segment consists of an optical laboratory, an optical products group purchasing organization and a marketing business. The company was founded in April 2015 and is headquartered in Nashville, TN.