Kora Saúde Participações S.A. (BVMF:KRSA3) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Shareholders will be ecstatic, with their stake up 21% over the past week following Kora Saúde Participações S.A.'s (BVMF:KRSA3) latest annual results. Revenues were R$1.0b, and Kora Saúde Participações was a dismal 18% short of estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Kora Saúde Participações

Taking into account the latest results, the most recent consensus for Kora Saúde Participações from five analysts is for revenues of R$1.99b in 2022 which, if met, would be a sizeable 93% increase on its sales over the past 12 months. Per-share earnings are expected to surge 1,284% to R$0.26. In the lead-up to this report, the analysts had been modelling revenues of R$2.20b and earnings per share (EPS) of R$0.28 in 2022. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The consensus price target fell 15% to R$6.90, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Kora Saúde Participações analyst has a price target of R$8.50 per share, while the most pessimistic values it at R$5.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Kora Saúde Participações' growth to accelerate, with the forecast 93% annualised growth to the end of 2022 ranking favourably alongside historical growth of 38% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 20% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Kora Saúde Participações is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although industry data suggests that Kora Saúde Participações' revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Kora Saúde Participações' future valuation.

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. At Simply Wall St, we have a full range of analyst estimates for Kora Saúde Participações going out to 2024, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Kora Saúde Participações (1 makes us a bit uncomfortable) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.