Surgery Partners has stopped growing, analysts says: What's next

A Seeking Alpha analysis questioned Nashville, Tenn.-based Surgery Partners' financial position, claiming the COVID-19 pandemic has put the company in a rough spot.

What you should know:

1. Surgery Partners, an ASC management company, owns ASCs and helps manage operations. The company receives revenues from both aspects.

2. While Surgery Partners has been cash flow positive, it has posted net losses for the last three years. During its first-quarter earnings call, Surgery Partners projected it would achieve a 10 percent positive compound annual growth rate by 2024, but the Seeking Alpha analyst believes the pandemic "will put a thorn in the side of that plan" due to elective surgery bans and patients being afraid to seek care.

3. Industry analysts believe the decreased volumes could cause cash-strapped surgery centers to turn to management companies for potential acquisitions. However, the Seeking Alpha analyst noted that while Surgery Partners' balance sheet "appears decent," making acquisitions during the pandemic could put financial strain on the company.

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