Monash IVF Group Limited (ASX:MVF) Just Released Its Half-Year Results And Analysts Are Updating Their Estimates

Monash IVF Group Limited (ASX:MVF) came out with its half-yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a workmanlike result, with revenues of AU$91m coming in 4.3% ahead of expectations, and statutory earnings per share of AU$0.045, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Monash IVF Group after the latest results.

See our latest analysis for Monash IVF Group

After the latest results, the three analysts covering Monash IVF Group are now predicting revenues of AU$168.7m in 2021. If met, this would reflect a modest 6.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to grow 11% to AU$0.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$163.6m and earnings per share (EPS) of AU$0.053 in 2021. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a solid gain to earnings per share in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of AU$0.94, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Monash IVF Group, with the most bullish analyst valuing it at AU$1.05 and the most bearish at AU$0.86 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Monash IVF Group is forecast to grow faster in the future than it has in the past, with revenues expected to grow 6.0%. If achieved, this would be a much better result than the 0.1% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 1.8% per year. So it looks like Monash IVF Group is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Monash IVF Group following these results. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at AU$0.94, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Monash IVF Group analysts - going out to 2023, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Monash IVF Group (at least 1 which is concerning) , and understanding these should be part of your investment process.

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