- Full-Year Revenue Growth: Net revenue reached $3.3 billion, up 6.2% YoY, with same-facility revenue growth of 4.9%.
- Adjusted EBITDA Underperformance: Adjusted EBITDA was $526 million, up 3.5% YoY but below expectations, with a 15.9% margin (40 bps compression).
- Second-Half Challenges: Q4 case growth slowed to 1.3% (670,000 surgical cases), impacted by capital delays, payer mix shifts, and three underperforming markets.
- Capital Deployment: $182 million in acquisitions in 2025, below the target, with eight de novo facilities opened (four in Q4) to drive growth.
- 2026 Guidance: Revenue projected at $3.3B–$3.45B with adjusted EBITDA of at least $530 million, reflecting 0.7% growth despite headwinds.
Operational Challenges
The company's surgical hospitals faced softer-than-expected case growth, payer mix shifts, and anesthesia dynamics, particularly in three markets. Despite this, the balance of the portfolio performed in line with expectations. The company performed nearly 670,000 surgical cases in Q4, with 1.3% same-facility case growth. The company remains committed to expanding facilities' capabilities to deliver high-acuity procedures, with investments in robotics and physician recruitment.
Capital Deployment and Guidance
The company deployed $182 million of capital toward acquisitions in 2025, modestly below its target. The company opened four de novos in Q4, making a total of eight throughout 2025. For 2026, the company expects net revenue of $3.3 billion to $3.45 billion, representing single-digit year-over-year growth, and adjusted EBITDA of at least $530 million. Analysts estimate revenue growth of 7.5% for next year, which is slightly higher than the company's guidance.
Valuation
The stock is currently trading at a P/E Ratio of -22.73, P/B Ratio of 1.03, and EV/EBITDA of 2.04. The negative P/E ratio is due to the company's net loss. The low P/B ratio suggests that the stock may be undervalued. The EV/EBITDA ratio indicates that the company's enterprise value is relatively low compared to its EBITDA. As J. Eric Evans mentioned, "We remain confident in our long-term structural growth, driven by organic, de novo, and acquired growth," which may justify the current valuation.