Should You Buy, Sell or Hold Pediatrix Medical Stock at a 9.28X P/E?

Core Insights - The rising share of commercial births in Florida is a significant growth driver for the company, expected to support margin growth [1] - The company is restructuring its portfolio by exiting affiliated office-based practices, aiming for an annual adjusted EBITDA improvement of approximately $30 million, with some benefits realized in 2024 and the remainder in 2025 [1] - The management forecasts adjusted EBITDA for 2024 to be between$205 million and $215 million, indicating a 4.8$9.7 million in Q1 [3] - Stable same-facility patient volume growth is expected to continue, along with a 5.3% increase in hospital contract administrative fees in the first nine months of 2024 [4] Financial Performance - The consensus estimate for 2024 adjusted earnings per share is $1.35, reflecting a 7.1% year-over-year growth, with revenue growth estimated at 0.1% [5] - The stock is currently trading at a discount, with a forward P/E ratio of 9.28X compared to the industry average of 13.98X, indicating undervaluation [8] - Over the past six months, the stock has surged 80.9%, outperforming the industry and key peers [10] Long-term Outlook - The company has strong long-term potential due to its focus on maternal-fetal medicine, stable patient volume growth, and projected EBITDA improvements from restructuring [13] - The completed transition to a hybrid RCM structure and active M&A activity further position the company for continued growth [13]