What Happened?
Shares of healthcare company Surgery Partners (NASDAQ: SGRY) fell 23.8% in the afternoon session after it reported third-quarter results that missed analyst expectations for profit and lowered its full-year 2025 financial forecast.
The company's adjusted earnings per share of $0.13 fell short of consensus estimates. While revenue of $821.5 million was roughly in line with expectations, investors focused on the dimmer outlook for the remainder of the year. Surgery Partners reduced its full-year revenue projection to a range of $3.275 billion to $3.30 billion and its adjusted EBITDA guidance to between $535 million and $540 million.
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What Is The Market Telling Us
Surgery Partners’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. But moves this big are rare even for Surgery Partners and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock dropped 6.1% on the news that President Trump criticized the Federal Reserve's approach to interest rate cuts, warning that the pace was slow and could hinder economic growth. Trump's comments added pressure to an already sensitive market, raising concerns about political interference in monetary policy. Meanwhile, Fed Chair Jerome Powell maintained a cautious stance the previous week, highlighting the difficulty of balancing the dual mandate of steady employment and price stability amid the escalating trade tension. Investor sentiment was further dampened by the absence of constructive progress in trade negotiations, especially US-China relations which took a turn for the worse in the previous week. Overall, the outlook seemed more unclear heading into the first quarter 2025 earnings season, as a combination of hard to predict monetary policy and unresolved trade tensions weighed on business confidence.
Surgery Partners is down 23.5% since the beginning of the year, and at $16.28 per share, it is trading 48.2% below its 52-week high of $31.43 from November 2024. Investors who bought $1,000 worth of Surgery Partners’s shares 5 years ago would now be looking at an investment worth $625.11.
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