Odontoprev S.A. Just Beat Revenue By 7.4%: Here's What Analysts Think Will Happen Next

The annual results for Odontoprev S.A. (BVMF:ODPV3) were released last week, making it a good time to revisit its performance. Results overall were respectable, with statutory earnings of R$0.68 per share roughly in line with what the analysts had forecast. Revenues of R$1.9b came in 7.4% ahead of analyst predictions. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Odontoprev

After the latest results, the consensus from Odontoprev's ten analysts is for revenues of R$1.77b in 2021, which would reflect a perceptible 6.4% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to sink 17% to R$0.57 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$1.84b and earnings per share (EPS) of R$0.56 in 2021. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of R$15.38, showing that the analysts don't expect weaker sales expectations next year to have a material impact on Odontoprev's market value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Odontoprev, with the most bullish analyst valuing it at R$17.20 and the most bearish at R$13.50 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 6.4% annualised revenue decline to the end of 2021. That is a notable change from historical growth of 7.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Odontoprev is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Odontoprev going out to 2025, and you can see them free on our platform here..

You still need to take note of risks, for example - Odontoprev has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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