Buy or Sell Pediatrix Medical Stock?

Pediatrix Medical (MD) stock has jumped 24% during the past day, and is currently trading at $21.08. We believe there are several things to fear in MD stock given its overall Weak operating performance and financial condition. This is aligned with the stock’s Low valuation because of which we think it is Fairly Priced.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $1.8 Bil in market cap, Pediatrix Medical provides newborn, maternal-fetal, pediatric cardiology, and other pediatric subspecialty care through a network of about 2,700 physicians in the United States and Puerto Rico.

[1] Valuation Looks Low

This table highlights how MD is valued vs broader market. For more details see: MD Valuation Ratios

[2] Growth Is Very Weak

• Pediatrix Medical has seen its top line shrink at an average rate of -0.5% over the last 3 years
• Its revenues have fallen -4.2% from $2.0 Bil to $1.9 Bil in the last 12 months
• Also, its quarterly revenues declined -3.6% to $493 Mil in the most recent quarter from $511 Mil a year ago.

This table highlights how MD is growing vs broader market. For more details see: MD Revenue Comparison

[3] Profitability Appears Moderate

• MD last 12 month operating income was $235 Mil representing operating margin of 12.2%
• With cash flow margin of 15.1%, it generated nearly $290 Mil in operating cash flow over this period
• For the same period, MD generated nearly $162 Mil in net income, suggesting net margin of about 8.4%

This table highlights how MD profitability vs broader market. For more details see: MD Operating Income Comparison

[4] Financial Stability Looks Strong

• MD Debt was $642 Mil at the end of the most recent quarter, while its current Market Cap is $1.8 Bil. This implies Debt-to-Equity Ratio of 36.1%
• MD Cash (including cash equivalents) makes up $463 Mil of $2.2 Bil in total Assets. This yields a Cash-to-Assets Ratio of 21.1%

[5] Downturn Resilience Is Weak

MD has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• MD stock fell 76.2% from a high of $35.15 on 30 August 2021 to $8.38 on 30 November 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $21.08 on 3 November 2025 $21.08

 
2020 Covid Pandemic

• MD stock fell 71.6% from a high of $27.79 on 1 January 2020 to $7.89 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 27 January 2021

 
2008 Global Financial Crisis

• MD stock fell 66.1% from a high of $35.84 on 17 January 2008 to $12.16 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 2 May 2011

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read MD Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.