Free Cash Flow ChallengesSGRY has delivered $22 mn free cash flow YTD, representing about 15% of the 2024 target of $150 mn and implying a steep ramp in the back half that likely weighed on the stock.
Ownership ConcernsInvestor concern about PE ownership (currently ~40% of outstanding shares) has created an overhang for the stock following a secondary offering.
Valuation And EstimatesEBITDA estimates remain largely unchanged, but stock-based compensation expense is increased and the price target is lowered to $32 from $35.