# Surgery Partners (SGRY.US)

Canonical: https://gigainvestors.com/s/SGRY

Analysis as of: 2026-10-16T07:31:52.282Z. Financial observations: FY2012–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $14.77 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 0 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 10

- Operating margin variation: 0.22×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.12×

- FY2018: 0.04×

- FY2019: 0.13×

- FY2020: 0.10×

- FY2021: 0.14×

- FY2022: 0.14×

- FY2023: 0.12×

- FY2024: 0.11×

- FY2025: 0.12×

- LTM to Jun 2026: 0.12×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 32.8%

- ROIC, second-lowest year: 3.5%

- Typical minus recent gross margin: 0.0 pp

- Typical gross margin (annual median): 23.1%

- Recent gross margin (lower of latest and 3-year median): 23.1%

- Years with nonpositive capital: 5

- Capital spending / revenue: 2.7%

- ROIC including acquisitions, ten-year median: -0.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 12.0%

- FY2017: 3.5%

- FY2018: 2.1%

- FY2019: 6.1%

- FY2020: 4.4%

- FY2021: >100%

- FY2022: 53.6%

- FY2023: 62.3%

- FY2024: >100%

- FY2025: >100%

### economics: fail

- owner earnings cash conversion below threshold

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: -$119M

- Net income, five-year total: -$383M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.4 pp

- Working capital / revenue, change between three-year averages: -2.9 pp

- Working capital / revenue, final three-year average: 14.7%

Chart: Owner earnings · five years; fiscal year observations.

- FY2021: -$30M

- FY2022: -$20M

- FY2023: $17M

- FY2024: -$106M

- FY2025: $19M

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 3.5% vs 108.7%

- Per-share earnings: 0.04 to -0.61 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 13.0%

- Ordinary dilution, 5-year annual growth: 21.1%

- Market cap gain: $1.2B

- Cumulative retained earnings: -$504M

- Diluted shares, 10-year annual growth: 13.0%

- Diluted shares, 5-year annual growth: 21.1%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: -$0.65

- Per-share value, starting three-year median: $0.04

- Per-share value, ending three-year median: -$0.61

- Buybacks concentrated in cheaper years (correlation): 0.60

- Average buyback yield: 1.6%

- Buyback history: 5 years

- Debt-funded buybacks: Yes

- Acquisition spending: $3.2B

- Cumulative net income, 10 years: -$824M

- ROIC, first three-year median: 3.5%

- ROIC, last three-year median: >100%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.20

- FY2017: -$1.10

- FY2018: -$4.28

- FY2019: -$1.55

- FY2020: -$2.38

- FY2021: -$0.98

- FY2022: -$0.59

- FY2023: -$0.09

- FY2024: -$1.33

- FY2025: -$0.61

### accounting: pass

- Sloan accruals: -4.3%

- Receivables to sales index (DSRI): 0.98×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 5.4%

- Earnings backed by cash: Yes

- Accounting red flags: 0

- Goodwill and intangibles / equity: 3.06×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.0%

- FY2017: -3.8%

- FY2018: -7.5%

- FY2019: -4.1%

- FY2020: -6.7%

- FY2021: -2.6%

- FY2022: -3.2%

- FY2023: -4.4%

- FY2024: -5.9%

- FY2025: -4.3%

## Holders

- [Howard Marks](https://gigainvestors.com/oc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 73% since Mar 2022 · "Its non-GAAP profit of $0.13 per share was 19% below analysts’ consensus estimates." (finance.yahoo.com, Nov 2025) · sales +1.7%

Story as of 2026-10-16T09:59:34.434Z; price observation 2026-10-15.

- 2025-08-13: SGRY Q2 Deep Dive: Orthopedics and De Novo Expansion Drive Steady Growth ([finance.yahoo.com](https://finance.yahoo.com/news/sgry-q2-deep-dive-orthopedics-035134189.html))

### Sales · FY2025–2026

sales +1.7%; source https://www.sec.gov/Archives/edgar/data/1638833/000163883326000008/sgry-20251231.htm; observed 2026-03-02.

- FY2017: $1.3B 

- FY2018: $1.8B 

- FY2019: $1.8B 

- FY2020: $1.9B 

- FY2021: $2.2B 

- FY2022: $2.5B 

- FY2023: $2.7B 

- FY2024: $3.1B 

- FY2025: $3.3B 

- FY2026: $3.4B 

### Gross margin · FY2025

gross margin 23.1%; source https://www.sec.gov/Archives/edgar/data/1638833/000163883326000008/sgry-20251231.htm; observed 2026-03-02.

- FY2016: 28.3% 

- FY2017: 24.4% 

- FY2018: 23.1% 

- FY2019: 23.1% 

- FY2020: 20.4% 

- FY2021: 22.1% 

- FY2022: 22.6% 

- FY2023: 23.6% 

- FY2024: 23.9% 

- FY2025: 23.1% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in medical care facilities; annual sales are USD 3.3 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1638833/000163883326000008/sgry-20251231.htm (filed 2026-03-02); FY2025: revenue 3308700000; grossProfit 765000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); SGRY.US: Surgery Partners, Inc., together with its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The company provides ambulatory surgery centers and surgical hospitals that offer non-emergency surgical procedures in various specialties, including orthopedics and pain management, ophthalmology, gastroenterology, and general surgery. It offers emergency departments; ancillary services such as physician practices and diagnostic testing; multi-specialty physician practices; urgent care facilities; and anesthesia services. In addition, it offers single- and multi-specialty facilities. Surgery Partners, Inc. was founded in 2004 and is headquartered in Brentwood, Tennessee.

### Why customers stay

Margins ranged from 23.1% to 23.9% during 2023–25; it earns 32.8% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2023: grossProfit / revenue = 23.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2024: grossProfit / revenue = 23.9%.

- Source: https://www.sec.gov/Archives/edgar/data/1638833/000163883326000008/sgry-20251231.htm (filed 2026-03-02); FY2025: grossProfit / revenue = 23.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); 10-year return on capital observations [[2016,0.12040456524562636],[2017,0.034681249241310476],[2018,0.021345014563354497],[2019,0.060932214329756464],[2020,0.04364377358490566],[2021,3.216655425343563],[2022,0.5360882820252343],[2023,0.6225090149933574],[2024,1.45706940874036],[2025,1.0868260651708268]]; median 0.32824642363543033. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 23% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1638833/000163883326000008/sgry-20251231.htm (filed 2026-03-02); Gross margin observations: [[2021,0.22084400701092086],[2022,0.22640097664710748],[2023,0.23602959938759888]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 7 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2016: growth capex 0; upkeep 39109000; cash acquisitions 146405000; owner earnings 9895000. Growth capex plus acquisitions / owner earnings = 14.795856493178373.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2023: growth capex 0; upkeep 88800000; cash acquisitions 80000000; owner earnings 17400000. Growth capex plus acquisitions / owner earnings = 4.597701149425287.

- Source: https://www.sec.gov/Archives/edgar/data/1638833/000163883326000008/sgry-20251231.htm (filed 2026-03-02); FY2025: growth capex 0; upkeep 78700000; cash acquisitions 162100000; owner earnings 19400000. Growth capex plus acquisitions / owner earnings = 8.355670103092784.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); Dividend observations: [[2016,85874000],[2017,1316000],[2018,7800000],[2019,121200000],[2020,109600000],[2021,5100000],[2022,146800000],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 1.8% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); SGRY.US SharesStats.PercentInsiders = 1.796 percentage points; cache date 2026-10-15.

### What the price says

The price is 0.6 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); Closing price 14.77 USD; reporting-to-trading FX 1; FY2025 annual sales per share 26.009952126028818; price multiple 0.5678595611569499. FY2025 cash earnings/share 0.15250493282707986. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $16.10 per share

- 2016-11: $14.75 per share

- 2016-12: $15.85 per share

- 2017-01: $18.50 per share

- 2017-02: $22.50 per share

- 2017-03: $19.50 per share

- 2017-04: $17.20 per share

- 2017-05: $21.80 per share

- 2017-06: $22.75 per share

- 2017-07: $19.85 per share

- 2017-08: $9.75 per share

- 2017-09: $10.35 per share

- 2017-10: $9.25 per share

- 2017-11: $9.40 per share

- 2017-12: $12.10 per share

- 2018-01: $15.55 per share

- 2018-02: $15.85 per share

- 2018-03: $17.15 per share

- 2018-04: $16.00 per share

- 2018-05: $16.25 per share

- 2018-06: $14.90 per share

- 2018-07: $15.10 per share

- 2018-08: $17.35 per share

- 2018-09: $16.50 per share

- 2018-10: $13.59 per share

- 2018-11: $14.35 per share

- 2018-12: $9.79 per share

- 2019-01: $13.08 per share

- 2019-02: $12.52 per share

- 2019-03: $11.28 per share

- 2019-04: $10.83 per share

- 2019-05: $8.57 per share

- 2019-06: $8.14 per share

- 2019-07: $7.63 per share

- 2019-08: $6.44 per share

- 2019-09: $7.39 per share

- 2019-10: $7.95 per share

- 2019-11: $13.78 per share

- 2019-12: $15.66 per share

- 2020-01: $16.87 per share

- 2020-02: $16.42 per share

- 2020-03: $6.53 per share

- 2020-04: $11.80 per share

- 2020-05: $13.41 per share

- 2020-06: $11.57 per share

- 2020-07: $15.27 per share

- 2020-08: $19.09 per share

- 2020-09: $21.90 per share

- 2020-10: $21.82 per share

- 2020-11: $24.43 per share

- 2020-12: $29.01 per share

- 2021-01: $37.28 per share

- 2021-02: $39.47 per share

- 2021-03: $44.26 per share

- 2021-04: $48.20 per share

- 2021-05: $58.53 per share

- 2021-06: $66.62 per share

- 2021-07: $54.56 per share

- 2021-08: $49.20 per share

- 2021-09: $42.34 per share

- 2021-10: $41.14 per share

- 2021-11: $44.36 per share

- 2021-12: $53.41 per share

- 2022-01: $42.67 per share

- 2022-02: $52.27 per share

- 2022-03: $55.05 per share

- 2022-04: $51.16 per share

- 2022-05: $39.20 per share

- 2022-06: $28.92 per share

- 2022-07: $39.38 per share

- 2022-08: $27.53 per share

- 2022-09: $23.40 per share

- 2022-10: $27.19 per share

- 2022-11: $28.31 per share

- 2022-12: $27.86 per share

- 2023-01: $33.20 per share

- 2023-02: $33.45 per share

- 2023-03: $34.47 per share

- 2023-04: $39.66 per share

- 2023-05: $37.48 per share

- 2023-06: $44.99 per share

- 2023-07: $38.63 per share

- 2023-08: $36.26 per share

- 2023-09: $29.25 per share

- 2023-10: $23.13 per share

- 2023-11: $32.75 per share

- 2023-12: $31.99 per share

- 2024-01: $30.69 per share

- 2024-02: $31.03 per share

- 2024-03: $29.83 per share

- 2024-04: $24.95 per share

- 2024-05: $27.60 per share

- 2024-06: $23.79 per share

- 2024-07: $30.36 per share

- 2024-08: $31.95 per share

- 2024-09: $32.24 per share

- 2024-10: $28.80 per share

- 2024-11: $23.84 per share

- 2024-12: $21.17 per share

- 2025-01: $25.49 per share

- 2025-02: $24.08 per share

- 2025-03: $23.75 per share

- 2025-04: $21.95 per share

- 2025-05: $23.61 per share

- 2025-06: $22.23 per share

- 2025-07: $21.95 per share

- 2025-08: $22.69 per share

- 2025-09: $21.64 per share

- 2025-10: $21.93 per share

- 2025-11: $17.07 per share

- 2025-12: $15.45 per share

- 2026-01: $14.86 per share

- 2026-02: $15.50 per share

- 2026-03: $11.92 per share

- 2026-04: $14.03 per share

- 2026-05: $13.36 per share

- 2026-06: $16.80 per share

- 2026-07: $15.40 per share

- 2026-08: $13.89 per share

- 2026-09: $13.87 per share

- 2026-10: $14.77 per share

## Annual estimated value (USD per share)

- FY2016: low $0.72 per share, central $0.81 per share, high $0.94 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1638833/000163883326000008/sgry-20251231.htm); period 2025-12-31, filed 2026-03-02.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.