Surgery (NasdaqGS:SGRY) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Surgery Partners, Inc. (NasdaqGS:SGRY) is scheduled to report Q3 earnings results before markets open for trading on November 4, 2020.

The company is expected to report earnings of -$0.34/share on revenue of $462.3 million. The consensus earnings per share (EPS) of -$0.34/share is based on a poll of 5 analysts and represents a decline in eps of -21.4% over the same quarter last year, when the company reported earnings of -$0.28/share.

The revenue forecast of $462.3 million based on a poll of 4 analysts implies a year-over-year (YoY) growth in revenue of 2.3%. Last year the company reported $452 million in revenue for the quarter.

Expected to report EPS of -$0.34/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $462.30 $452.00 2.3%
EPS -$0.34 -$0.28 -21.4%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 8 tracked quarters, and missed expectations 6 quarters.

What are your expectations from Surgery Partners, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.74 -$0.48 34.9% Beat
Q1, 2020 -$0.40 -$0.34 15.2% Beat
Q4, 2019 $0.17 $0.14 −20.2% Missed
Q3, 2019 -$0.18 -$0.28 -54.0% Missed
Q2, 2019 -$0.15 -$0.29 -98.9% Missed
Q1, 2019 -$0.25 -$0.42 -66.3% Missed
Q4, 2018 $0.31 -$0.17 −156.9% Missed
Q3, 2018 -$0.09 -$0.19 -123.5% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 26.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $16 $20.19 26.2% Increase
May 11, 2020 $10.94 $11.07 1.2% Increase
March 5, 2020 $15.28 $10.76 −29.6% Decline
November 5, 2019 $8.70 $10.65 22.4% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.80, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.80 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Surgery Partners, Inc. is currently trading at $21.67/share, down −0.2% for the day. The company is trading at approximately 86.8% of its 52-week high of $25/share. The company’s stock price is up 7.3% since the last earnings report and down −2.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 44.70 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SGRY Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −8.12 and a forward P/E multiple of −15.88.

Surgery Partners, Inc.’s current share price also implies a price-to-book (P/B) multiple of 5.26. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $21.67
P/E Ratio −8.1x
P/E Ratio (Fwd) −15.9x
PEG Ratio −0.2
Total Debt / Total Capital 55.3%
Levered Free Cash Flow $231.7 million
EV / EBITDA 19.2x

Finbox

Surgery Partners, Inc. is a small-cap stock with a market capitalization of $1.081 billion and a total enterprise value of $5.266 billion. The company operates in the Healthcare sector and the Healthcare Providers & Services industry.

Surgery Partners, Inc., through its subsidiaries, owns and operates a network of surgical facilities and related services in the United States. The company operates through three segments: Surgical Facility Services, Ancillary Services, and Optical Services. Its surgical facilities comprise ambulatory surgery centers and surgical hospitals that offer non-emergency surgical procedures in various specialties, including gastroenterology, general surgery, ophthalmology, orthopedics, and pain management. The company’s surgical hospitals also provide ancillary services, such as diagnostic imaging, pharmacy, laboratory, obstetrics, oncology, physical therapy, and wound care; and ancillary services, which consist of a diagnostic laboratory, multi-specialty physician practices, urgent care facilities, anesthesia services, and optical services. It also operates optical laboratory that manufactures eyewear. As of March 31, 2020, the company owned or operated a portfolio of 127 surgical facilities, including 111 ambulatory surgical centers and 16 surgical hospitals in 30 states. Surgery Partners, Inc. was founded in 2004 and is headquartered in Brentwood, Tennessee.

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