Why AmSurg Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of ambulatory surgery center operator AmSurg (Nasdaq: AMSG  ) climbed 11% on Wednesday after its quarterly results and guidance impressed Wall Street.

So what: AmSurg's first-quarter EPS was largely in line with estimates, but a wide beat on the top line -- revenue of $230 million versus the consensus of $219 million -- reinforces optimism over the several demand tailwinds working in its favor. In fact, the stock is hitting a new 52-week high on the news and is up about 50% from its August lows.

Now what: Management now sees full-year adjusted EPS of $1.97-$2.01 on revenues of $905 million-$925 million, versus Wall Street's view of $1.98 and $911 million. "We believe that our prospects for long-term growth continue to strengthen," said CEO Christopher Holden. "In addition to significant industry growth prospects based on favorable demographics, expanding access, a large underserved population and increasing lifestyle risks such as obesity, freestanding ASCs are increasingly recognized as providing high quality care in the lowest cost modality." With the stock still trading at a reasonable forward P/E in the mid-teens, there might even be some room to buy into that bullishness.

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