Surgery Partners (SGRY)

What Moves the Stock

1. 01Same-facility case volume growth rates (organic demand indicator, typically 2-5% quarterly growth)
2. 02Acquisition pipeline activity and integration execution (10-20 facilities annually at 6-8x EBITDA multiples)
3. 03Commercial payor mix percentage (commercial cases generate 200-300 bps higher margins than Medicare)
4. 04Surgical facility utilization rates and revenue per case trends (pricing power and efficiency metrics)
5. 05Debt refinancing activity and leverage ratio trajectory (currently 2.2x D/E, target path toward 1.5x)
6. 06Ambulatory surgery center procedures (~75-80% of revenue): outpatient surgeries across orthopedics, ophthalmology, gastroenterology, pain management, and general surgery
7. 07Surgical hospital services (~15-20%): short-stay inpatient and outpatient procedures requiring overnight observation
8. 08Ancillary services (~5%): anesthesia services, physician services, and other procedural support

SGRY Chart

My Notes

• value - The stock trades at 0.6x P/S and 7.0x EV/EBITDA, well below healthcare services peers (typically 10-12x EBITDA)…
• Rising interest rates increase borrowing costs on the company's $1.4-1.6B debt load (estimated based on 2.24x D/E ratio)…
• Watch on earnings: Monthly elective surgery scheduling trends and case volume growth by specialty (leading indicator of demand), Commercial insurance enrollment levels and employer-sponsored coverage rates (drives payor mix quality), Medicare Physician Fee Schedule updates and ASC payment rate changes (annual CMS rulemaking in November).