Is Surgery Partners, Inc. overvalued or undervalued?

As of 6 August 2024, the valuation grade for Surgery Partners, Inc. has moved from very attractive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued, with a P/E ratio of 39, which is substantially higher than the industry average. Additionally, the EV to EBITDA ratio stands at 8.95, while its ROE is only 4.40%, suggesting that the company's profitability is not commensurate with its high valuation.
In comparison to peers, Surgery Partners, Inc. has a P/E ratio of 34.02, while Select Medical Holdings Corp. is considered very expensive at a P/E of 7.26, and Premier, Inc. has a P/E of 14.00. This stark contrast highlights the overvaluation of Surgery Partners, Inc. Furthermore, the company's recent stock performance has lagged significantly behind the S&P 500, with a one-year return of -17.52% compared to the index's 10.26%, reinforcing the notion that the stock may be overvalued in the current market environment.